SUGAR

HC Deb 24 October 1973 vol 861 cc1276-390

Mr. Speaker

Before calling upon the right hon. Member for Stepney (Mr. Shore) to move the motion relating to United Kingdom imports of cane sugar, I would inform the House that I have not selected the amendment to the motion.

4.24 p.m.

Mr. Peter Shore (Stepney)

I beg to move, That this House, recalling the dependence of developing Commonwealth countries, both on the sale of cane sugar to the United Kingdom and on orderly marketing through the International Sugar Agreement, accepting the need for the EEC to curtail its own production of beet and to join a new International Sugar Agreement as a major net importer of sugar and, noting the interests of those employed in the sugar refineries on the Clyde, the Mersey and the Thames in the maintenance of a viable refining industry in the United Kingdom, calls upon Her Majesty's Government to reaffirm and honour its undertakings to the Commonwealth sugar producers to import 1.4 million tons of cane sugar when the present Commonwealth Sugar Agreement ends and to insist upon major accompanying changes in the sugar policies of the EEC. Subject to the Minister's confirmation, I gather that the motion is almost in his name, too. This is a very welcome development. The more we can get the Government's agreement on major matters which are of importance to the whole of the country in relation to dealings with the European Communities, the better it will be. Therefore, I shall not, as it were, make any triumphant noises. That would be quites inappropriate at present. I simply welcome that fact and say that this motion about sugar should take its place with previous motions which the House has passed, for example, on juggernauts, live animals and vehicle licensing. It is part of a series—I hope a continuing series—of matters upon which the House will assert itself and insist upon policies and changes within the EEC which are consistent with the interests of our people and our Commonwealth friends.

As the motion makes clear, the focus of the debate is the future of cane sugar exports to the United Kingdom. But, as the House will be aware, the issue here is very important. It is not only important in itself; it is symbolic of the whole relationship between the advanced countries of Western Europe and the developing countries in the third world. It is the relationship between half of a continent where the per capita income is well over £1,000 a year and poor countries, in the Caribbean, the South Pacific, the Indian Ocean and, indeed, India, where the per capita income is very often below £100 a year. It is a relationship between a prosperous area in Western Europe, where some 6 million "guest workers", as they are called, are employed because the labour resources of Western Europe fall far short of the extent of its economic development, and areas outside Europe where unemployment is so chronic that in the West Indies it runs at between 20 per cent. and 25 per cent. and in other areas it is too large even to be measured.

The debate is about whose interests—Europe's or the third world's—shall have primacy in our future sugar policy. That is the heart of the matter that we are discussing. The debate is also about employment in Britain, particularly in the cane refineries on the Clyde, the Mersey and the Thames. Many thousands of jobs are at stake. Nearly half of them are in areas of high unemployment in the development areas, and much of the rest in the area of East London along the Thames which has suffered in recent years certainly the greatest collapse of employment to be seen anywhere in the South-East region.

It is not the owners of Mr. Cube that we are concerned about when we talk about the cane refining industry. When we put his sugar into our coffee and tea, we learned long ago to stir it with an exceptionally long spoon. But what we are concerned with are Mr. Cube's employees, and they have a serious interest. It is one thing for the men and women of this country in the 1970s to face the prospect of job loss because their industries have ceased to be competitive and redundancies are unavoidable. That happens all too often. But it is another thing for the miseries of unemployment to be inflicted not because our sugar refining industry is less efficient than that of its competitors but precisely because it is more efficient and can be rendered less so only by the bizarre arrangements of the CAP. That is the truth of the matter.

Lastly, the debate is about the categoric pledges given by the Government to Commonwealth sugar producers just over two years ago and embodied in the Lancaster House communiqué of June 1971 and about our ability to honour them in the period ahead. I have no doubt that it is the wish of the House and of the Government, too, to honour those pledges. But the question that we have to bear very much in mind is our ability to do so, and to do it effectively and in a way which in the end will not cancel out—I shall return to this matter later—the very advantages which that commitment to take 1.4 million tons confers. While we accept that negotiations within the EEC and between the EEC and sugar exporting countries are not yet over, the course of the talks so far, as the right hon. Gentleman today made all too depressingly clear, has justifiably given rise to serious worries about their eventual outcome.

The House will recall that the proposals put forward by the Brussels Commission this July contained amongst other things the acceptance of 1.4 million tons of imported cane sugar, the recommendation that the EEC should join the new International Sugar Agreement as a substantial net importer of sugar, that beet sugar production be cut back within the EEC and that a new system of allocating quotas be agreed for beet producers.

If we accept the framework of the CAP—I shall return to that matter later—there is sense in the general direction of the proposals which I have mentioned. However, the House will recall that when the Minister of Agriculture, Fisheries and Food last faced the House on 18th July, I expressed one major reservation—namely, the size of the export quota which the Commission recommends for the EEC as part of the price for joining the new International Sugar Agreement—if such an agreement exists. The House will recall that the figure was no less than 800,000 tons. That is far too much.

Only six years ago the EEC of the Six was a net importer of sugar, as had been West European countries historically for most of this century. In 1968 the full protectionism of the CAP came into effect and imported sugar has been steadily squeezed out ever since. So much so, that in 1971 the Europe of the Six exported nearly 1 million tons of beet sugar. Last year it exported 1.4 million tons. That is an interesting and significant figure. The estimates for this year are that exports will be higher still. The acreage coming under beet producion is growing all the time. Inevitably beet sugar exports of such magnitude, except in exceptional circumstances such as those which have applied this year, which I willingly acknowledge, cut into the markets which would otherwise be available to cane sugar producers.

While I maintain that the Commission's proposal for exports is too high, I accept that some of the other features of the package which it put forward are acceptable. However, the Commission, as we know, only proposes in the EEC. It is for the Council of Ministers to dispose by unanimous agreement. The reaction of Continental Governments, and principally the reactions of France, to the Commission's package, was extremely hostile.

I shall not bother the House by quoting extensively from M. Chirac, but he used such wording as "ridiculous proposals". He challenged the Commission as being incompetent. He even raised the matter whether the Commissioner concerned should not remember his national loyalties. That created something of a fuss.

That was not all. With the ISA negotiations coming to a critical point in September it was essential that the EEC should agree both to the proposition of membership of the ISA and about the quanties of sugar which it was prepared to import. The Commission was denied a negotiating position. It was denied a mandate by the French Government. Consequently, the Commission sat only as observers throughout the critical sessions in September and during the beginning of this month.

I do not accept that it made no difference to the future of the ISA agreement whether or not the Commission was muzzled. That would be an absurdity, if true. The result is that no new ISA has been negotiated. There is a danger that when the present ISA expires on 31st December there will be a free market in world sugar trade. Only the short sighted will derive comfort from the fact that sugar prices of today are nearly at record levels. I am aware of the FAO report which looked forward to a period of longer-term stringency in the sugar market. Against that, it is the judgment of virtually all those who are experienced in the sugar trade that long before this decade is out, and probably well within the next two years, supply will outstrip demand, with devastating effects on price levels. I remind the House in that context that the price of sugar was as low as £15 a ton as recently as 1967.

Our next concern is related to the fact that the EEC will be prepared to take 1.4 million tons of cane sugar from the developing countries in the years ahead without insisting on large and growing offset exports of beet only if a policy decision is made to cut back the production of beet sugar in Europe. That is where the surpluses are generated and where continuing pressure against imported cane will develop.

We face the bitter opposition of some Community Governments and the powerful interests of European sugar beet growers. I shall refer to an interview which was given by M. Henri Cayre, the President of the Confederation of European Beet Growers, in Paris on 25th June of this year. He said: It is absolutely essential that the negotiators representing the Commonwealth developing countries at the forthcoming negotiations have a clear view of the basic facts about the economics of European sugar. European producers will never be able to agree to reducing the area under cultivation. European expansion has been made necessary by the existence of a world shortage which has been going on for the last three years and which looks likely to continue. The European producers are guaranteeing European self-sufficiency in sugar and have every intention of going on doing so. They would like Europe to help the developing countries, but backed by the whole of European agriculture, and with the help of COPA in particular, they will fight to see Community Preference safeguarded. They cannot therefore agree to the introduction of Commonwealth sugar unless they have an assurance that the whole of Community consumption will be guaranteed to European producers, and the cost of the necessary reexport of Commonwealth sugar be borne by the European Development Aid Budget. There is no lack of clarity in the view put forward in that statement.

Next, in the list of genuine anxieties which are shared by all those who have studied the problem, I must refer to the serious pressure mounted against our sugar refining industry—namely, the attempt to impose upon it refining margins so low that it will be forced into loss making and collapse.

Those who followed the sugar negotiations two years ago will have some idea of the problem we would face to get a reasonable deal for our Commonwealth exporters and to get some sense into the European sugar régime. However, it never occurred to anyone, including the Government, that sustained efforts would be made greatly to disadvantage the British refining industry by attacking its margins even before the current Commonwealth Sugar Agreement was due to expire. We all know that if the Government had not introduced last June its so-called subsidy, which as the right hon. Gentleman knows, is a tax rebate, and if the Commission's ruling against it had not itself been quite unusually overturned by the unanimous vote of the Council of Ministers, the British refining industry would now be in jeopardy.

On 30th June 1974 we shall again be dependent upon the unanimous vote of the Council of Ministers if our cane refineries are to continue to be financially viable. The Minister knows very well that his chances of getting a long agreement in the Council of Ministers on the refining margins will be slim unless he satisfies the European beet growers and the Governments which support them that their demands for a growing market for beet sugar will be met. That is the kind of bargaining which he must inevitably face.

It is against that background that it is inevitable that we should feel great concern about the future of Commonwealth sugar exports and our own cane refining industry. Those anxieties are greatly reinforced by our recollection of the basic flaw in the original arrangement agreed to in the Treaty of Accession.

It will be recalled that the Lancaster House communique which embodies the undertakings given by the Government to the Commonwealth countries was never entered into the Treaty of Accession. It forms no part of it either as an annex or a protocol. Instead, in Protocol 22 there is only the now famous but un-specific assurance that the Community will "have at heart" the interests of Commonwealth sugar producers. There is no mention there of quantities, prices or periods of time. Beyond that, there is just a mention in Protocol 17—and it is not a helpful one—that Britain will be allowed to continue to import Commonwealth sugar until February 1975.

These matters were debated on 27th June 1972 on an Opposition amendment which sought explicitly to safeguard our sugar supplies by exempting imported cane sugar from the provisions of Clause 7 of the European Communities Bill. That amendment was defeated by only eight votes. Had the Liberal Party decided on a different line I have no doubt that the amendment would have been carried. I do not know whether the Liberal Party tonight will divide the House against the motion but logically, in accordance with the position it took then, it presumably will, because we are seeking to insert into the Resolutions of the House that which we failed to write into the Bill. That vote in 1972 reflected the great unease in the House arising from the inability of the Chancellor of the Duchy of Lancaster to fill the void that had opened up between the Government's unilateral declaration to the Commonwealth countries and what the Community was prepared to accept.

We inevitably face our present anxieties not from the basis of a firm and secure Community agreement to) import 1.4 million tons of cane but from the much less substantial commitment embodied in the words of Protocol 22. Let no one doubt that there is real anxiety about this matter. Only two days ago Mr. Percival Patterson, the Jamaican Trade and Industry Minister, said in London that the European Community had failed to translate its promises into reality. It was clearly understood that the original six-member Community had given a guarantee. He went on to say: One of the things that concerns us is that it has been strongly suggested by the French that the question of the quantity is in doubt. It causes us anxiety to hear that this is still open to question. I am not speaking simply from a British point of view. This matter is very much in the thinking and concern of the Commonwealth sugar producers.

That is why we thought it necessary in the motion to reassure Commonwealth countries and to make plain to the EEC that the Government have behind them the whole-hearted support of the House—except perhaps for the Liberals—in insisting that the Lancaster House commitment of June 1971 be fully honoured.

While it would be a considerable relief to have clearly stated the Community agreement to take 1.4 million tons of cane sugar, we should be naive if we did not look closely at the whole context of the EEC sugar policy in which imported cane will be placed. To put it bluntly, it is not much good taking 1.4 million tons of Commonwealth cane sugar through the front door of Europe if 1.4 million tons of protected European beet sugar goes out through the back door on to the world market. That is the situation that we are in today, not the situation of the future. The quantity that the enlarged Community takes in today will be exported by it in the form of subsidised beet sugar.

Western Europe as a whole has already ceased to be an importer of sugar from the developing countries. If this simply reflected the superior natural advantage of Western Europe in sugar production then, however reluctantly, we would have to face the facts. But that is not so. Western Europe has become first self-sufficient and now a major exporter not because it enjoys any natural advantage in growing sugar, not because the real price of sugar is lower in Western Europe than it is elsewhere, but simply because it enjoys the total protection of the CAP and its many devices.

For the moment the conflict of interest between cane and beet sugar producers is constrained because sugar is in short supply and the price gap between the two has substantially closed, but the conflict of interest remains and it will re-open before long. If cane producers are to have a chance, it will then be essential for the European beet growers to cut back their production. That is what the Commission has recommended, but we have a long way to go before that recommendation is accepted and turned into the real policy of the Community via the Council of Ministers.

It is this, amongst other things, that has made it impossible for the EEC to join the negotiations for a new International Sugar Agreement. If the EEC does not join it, as it failed to join its predecessor in 1968, no limit will be placed on beet sugar exports or on the price at which it can be sold. This means that surplus European beet will compete with cane sugar in third markets. But, because surplus beet earns an export rebate largely but not exclusively from the budget of the CAP, Community sugar will be able to be sold at the lowest price while its producers will receive a guaranteed income based upon the European price for protected sugar.

If anyone has any doubt about the magnitude of the sums involved, they should look at the guarantee section of FEOGA and see the items listed there year by year for the export restitution payments on exported sugar. Taking the last three years, they are running at the rate of well over £50 million a year. That is what it costs to subsidise the sugar. This could play havoc with world markets.

The poorer developing countries of the Commonwealth sell not only to Britain but to the rest of the world as members of the International Sugar Agreement. At least one-third of their earnings come from ISA sales. Their prosperity could be equally destroyed if their world markets were undermined by Community sugar exports as it would have been if they had been denied substantial access to the United Kingdom. The danger is all the more real because if the Australian producers are cut off from the British market, they are bound to add their considerable export tonnage to the world supply, again with a depressing effect on world prices.

The surest way of undermining the Commonwealth sugar producers is to destroy the cane refining industry in the United Kingdom. The interests of the Commonwealth producers and the workers in our great refineries are indeed at one on this matter. If our refineries are closed either through lack of sufficient sugar supplies or through an unrealistic pressure on their refining margins, the cane sugar producers in the Commonwealth will have lost their only secure industrial base in Western Europe

I want to ask the Minister one or two questions on this point. There has been much talk about reorganisation of the cane sugar and beet sugar industries in Britain, but I have seen no clear proposals on this. I do not intend to offer a judgment about the form any change should take, but I want to put to the Minister this basic question: whatever may be the merits of reorganisation—and we have not yet seen any precise proposal—surely what matters is the supply of sugar for the cane refineries. No doubt proposals for reorganisation have in mind the possibility by reorganisation of increasing the supply of sugar for the cane refineries.

But if the supply to the cane refineries is the essence of the matter, can the right hon. Gentleman give us assurances on three points? First, is he doing everything in his power to ensure that any rundown of Australian sugar will be spread out over the longest possible period? Secondly, has he raised at Brussels—if not, will he do so—the question of accompanying any rundown of Australian cane to Britain by an increase of Commonwealth developing countries' cane to take its place? Thirdly, will he ensure that the beet sugar quota that has been refined in the cane industry in recent years will continue to be available to it so that it is not faced with a cut-off of supplies which would undermine employment and the economic viability of the cane industry?

Mr. Eric S. Heffer (Liverpool, Walton)

Is my right hon. Friend aware that some of us are not happy with the figure of 1.4 million tons, because that figure means a loss of jobs? If 1.4 million tons goes to the whole of the EEC, it will mean another 15 per cent. loss, leading to a further reduction of jobs in this country. Some of us believe that it should be at least 1.7 million tons, or even higher, in order to maintain the present level of employment for our workers on Merseyside, in London and on the Clyde.

Mr. Shore

I am grateful to my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) for bringing out the point with greater clarity because it needs to be made clear. The 1.4 million tons is simply the base that has to be the necessary foundation. Beyond that, I am asking the Minister to consider, with his colleagues in Brussels, the whole question of importing more cane sugar from the developing Commonwealth countries to take the place of any gradual rundown of the 300,000 tons of Australian sugar. Beyond that, we should continue with the beet quota so that, in this period of inevitable uncertainty, no sudden pressures develop upon our cane sugar industry.

Sir John Tilney (Liverpool, Wavertree)

Would the right hon. Gentleman not also agree that it is vital that the refineries make a profit for otherwise they will not be there for the colonial sugar?

Mr. Shore

I had hoped that I had made that plain in what I said earlier about the cane refinery margin. It is essential that this should be a viable margin, based upon the real costs of refining cane, and not, as it were, a kind of by-product of beet factories processing beet and doing some refining as well. That I wholly accept and endorse.

Finally our motion refers to …major accompanying changes in the sugar policies of the EEC.'' We are right to stress the importance of these words and of such changes. Unless the EEC sugar policies change radically, there can be no continuing secure market for cane sugar producers in the developing world.

The real enemy is the common agricultural policy. I am not concerned with that policy where its protective mechanisms are used to keep our competitive agricultural produce from countries which are themselves prosperous, although I have never been able to understand why Britain should be compelled to buy dearer European food when cheaper North American and Australasian produce is available.

But whatever may be said about the CAP in general, there surely can be no question at all that where it competes with the interests of poor producers in the countries of the third world its protectionism cannot be tolerated. On what basis of sense or morality can anyone justify growing, behind high protectionist walls in Europe, sugar and rice which are grown far more cheaply in developing countries? How can anyone justify that such protection be carried to the point where not only is Europe self-sufficient but vast surpluses are created which are dumped at subsidised prices in markets which might otherwise go to poorer people?

I am glad that it is the wish of the House to endorse and accept this motion. To insist on the 1.4 million tons is the first and necessary step, but we must also see that the benefits are not allowed to be offset by existing policies for European sugar. In supporting the motion we are insisting on a change in the CAP itself. Sugar was the last commodity to come within its ambit. We must see to it that it is the first from which the CAP's present protection is withdrawn.

4.57 p.m.

The Minister of Agriculture, Fisheries and Food (Mr. Joseph Godber)

I do not think anyone can complain about the way in which the right hon. Member for Stepney (Mr. Shore) has moved the motion. The Government will have no difficulty in agreeing with a great deal of what he has said, and it is useful that the House should have the opportunity of considering all these matters together.

I make one point which I hope the right hon. Gentleman will not take as being too critical. In the whole of his speech, he did not refer to one aspect which we should not lose sight of, namely, that we have not only cane sugar refiners and workers in this country but our own domestic beet sugar production and the workers concerned with that.

Mr. William Ross (Kilmarnock)

The right hon. Gentleman means in England.

Mr. Godber

Very well. I take the point made by the right hon. Member for Kilmarnock (Mr. Ross), and I understand it. Over the years, under successive Governments, of different colours, it has been the policy to restrain deliberately the production of beet sugar in this country to ensure the continued opportunities for cane sugar. We should not take for granted the self-sacrifices that British farmers and workers have concurred in to make way for the substantial import of sugar over the years.

This debate is concerned with two distinct issues: first, the future arrangements for Commonwealth sugar; and second, the future of the British sugar industry. They are, of course, linked, but they are far from identical. On both, I believe that the best answer to the right hon. Gentleman is to put the facts before the House, and I want to put them as clearly as I can this afternoon. There are a great many facts, but I shall seek to be as brief as I can.

I shall deal first with the future arrangements for Commonwealth sugar. The House will recall the assurance which was negotiated by my right hon. and learned Friend the then Chancellor of the Duchy of Lancaster, which was later referred to in Protocol 22 of the Act of Accession. At the Lancaster House Conference in June 1971, we, and the Governments of the Commonwealth countries concerned, agreed together to regard this undertaking by the Community as—I quote the words of the communiqué: …a firm assurance of a secure and continuing market in the enlarged Community on fair terms for the quantities of sugar covered by the Commonwealth Sugar Agreement in respect of all its existing developing member countries "— that is to say, the 1.4 million tons to which the right hon. Gentleman has referred.

We told the Community that this was our interpretation. This pledge has been repeated on many occasions since then, and certainly at the Lancaster House Conference, at which I had the honour of taking the chair, in March of this year. These are the pledges we have given, and we stand by them. They have now to be translated into Community regulations, to take effect when the Commonwealth Sugar Agreement expires at the end of next year.

In July this year the Commission presented to the Council a memorandum on the Community's future sugar policy. I emphasise that it was a memorandum and not a definite proposal, and in it the Commission expressly confirmed the commitment to take 1.4 million tons of sugar from the developing countries. The Council of Ministers has discussed the memorandum and I have most strongly supported that proposal. Throughout our discussions I have asserted the need for the Community to undertake to import 1.4 million tons from the developing Commonwealth at a fair and remunerative price.

The question of price has not been touched on to any extent, although it was mentioned in an intervention. The question of price is essential, and the proposals by the Commission have still to be agreed with the developing countries. For some they present no problems, because in some countries the Government controls the sugar industry, in others it is separate from the Government. Therefore, the developing countries need carefully to consider this aspect, which is very complicated. I will not bore the House with it this afternoon, unless it is its wish that I should do so.

Mr. Alfred Morris (Manchester, Wythenshawe)

The right hon. Gentleman has referred to the EEC Commission's proposals. As he knows, M. Jacques Chirac has described the proposals as ridiculous. In plain words, how does the right hon. Gentleman respond to that remark?

Mr. Godber

I responded to that remark at the time and said that we had to ensure that the 1.4 million tons was accepted. I have reaffirmed that since. At the meeting of the Council of Ministers in September when this was discussed I reaffirmed that figure, which was supported all round the table. Our French colleague did not seek to reject it. He said that he thought it was excessive but did not seek to reject it. We shall, I am sure, reach a satisfactory conclusion based on that.

Sir Elwyn Jones (West Ham, South)

Do the commitment and the pledge mean that the 1.4 million tons should come, not into the EEC, but into this country? This is the concern of the sugar refiners in this country.

Mr. Godber

If the right hon. and learned Gentleman will wait, I intend to go in some detail into the various aspects of this matter and will try to explain the position to him. Briefly—I will come back to this matter in the course of my speech—the position is that it will have to be imported into the Community. This is the arrangement.

But the proposal in the Commission's memorandum, to which I have referred, is that 85 per cent. to 90 per cent, of it shall be dealt with by the port refiners. The port refiners are almost exclusively the refiners in this country, so it is not a complete commitment that it will come to this country, but if the refiners here wish it to come, and if the Commonwealth countries wish it to come—and this is a very important aspect—then I believe it will come. But it is for the Commonwealth countries to decide. They could, if they wished, have it refined elsewhere. They are the owners of the sugar, and it is they who must decide. It is not we in Britain who can decide this point.

While there are a great many details still to be resolved in regard to the 1.4 million tons proposal, all the other countries, apart from France, have already accepted it. This is part of wider proposals in the context of the whole question of the future sugar regime and, obviously, we must consider all these factors together.

I am satisfied that the commitment will be achieved. We have fought for this throughout the years of negotiation and I am confident that we shall achieve it. I do not normally make statements of that kind unless I feel very sure indeed. The House can take it from me that I should not do so now if I were not certain that we should achieve it.

Mr. Shore

Is the right hon. Gentleman equally confident that he will achieve a situation in which that 1.4 million tons is not offset by an export of 1.4 million tons of beet sugar?

Mr. Godber

If only the right hon. Gentleman will wait and let me develop my speech in my own way, I am coming to all these points in due course, but I must take it in sequence, as he himself sought to do.

The right hon. Gentleman specifically referred to the anxieties of Mr. Patterson of Jamaica. There were talks last week on the Protocol 22 negotiations by the Commonwealth developing countries. I have not seen Mr. Patterson in the last few days but I saw the Prime Minister of Fiji during the weekend. He had come on from those same discussions and told me that he was entirely satisfied with the way things were going, though he thought they were going rather slowly. But he did not feel in any way nervous about them and was fully satisfied with the United Kingdom Government's attitude. He told me I could say that to the House if I was questioned on the matter today.

The assurances I have mentioned did not, of course, relate to Australian sugar. We recognised from the outset that it would be impossible to negotiate long-term arrangements for Australia after the Commonwealth Sugar Agreement expired. The Labour Government came to exactly the same conclusion when they applied for membership of the Community. The only difference between us is that—to judge by the speech given by the then Foreign Secretary, now Lord George-Brown, in 1967—it appeared at that time that they envisaged an abrupt termination of Australia's exports while we believe they should be phased out. That is the difference, if any, between us.

It was with this particularly in mind that we negotiated Protocol 16 of the Treaty of Accession, which provides for the Community to take short-term action to avoid problems which might otherwise arise for third countries from the immediate adoption of the Common Agricultural Policy by the new member States. Resting on these provisions, Australia herself has now proposed a phasing-out over three years, and I have publicly supported them in this request.

These proposals go far wider of course, than the quantity of sugar which the Community will import in the future. They deal with the manner in which it should be purchased and how it should be allocated between users when it has been imported. They also cover the future arrangements for internal production from sugar beet, which should take over when the present régime—that is, the régime for sugar beet—expires after the 1974 crop.

I regard this, and I must say so frankly to the House, as the least satisfactory part of the Commission's memorandum. Briefly, it proposes that the present rather rigid quota arrangements for beet sugar production should be continued and intensified—and, moreover, that they should be continued in a manner which I regard as discriminating against the United Kingdom.

The beet sugar industry here, which has been so severely restricted over the years to make room for Commonwealth sugar, ought, in my view, to be given fair opportunity for expansion to take account of the phasing-out of Australian sugar and to give it some comparability with the industries of other member States. How this should be done—by quota arrangement or by more open arrangement which would favour the most efficient producers—will be a matter for negotiation, and I foresee long debates on this issue in Brussels. Meanwhile, I have left my Community partners in no doubt about the British Government's views.

Another part of the Commission's memorandum deals with the attitude that the Community should adopt to a new International Sugar Agreement, if and when one is negotiated. We had, of course, hoped that the recent conference in Geneva would have done so, but unfortunately it broke down on 13th October without any agreement having been reached on any provisions to regulate the international sugar market. The stumbling block was that the main exporters and importers—countries such as Cuba, Australia, Canada and Japan—could not agree among themselves.

The Community had nothing to do with the breakdown—I must emphasise that in the light of what the right hon. Gentleman said. He said that the Community took no part, and that is true. But whether the Community took part or not, the breakdown was there and the breakdown took place because the main importing and exporting countries were unwilling to contemplate the price levels that the other side in each case had put forward.

Mr. Neil Marten (Banbury)

Is it not true that in the past, when Britain has played its part in these negotiations, our very skill and knowledge of this industry and our worldwide connections have played a great part in bringing about an international agreement? This time we did not have an independent voice. We had no mandate from the Council of Ministers, so we were done.

Mr. Godber

That is perfectly true as far as it goes. In fact, the situation never reached a position where we could have done the sort of thing which my hon. Friend has said we were able to do in the past. The simple fact is—and people must recognise this—that the world price of sugar is high at present and that producing countries are perhaps overconfident and are unwilling to settle on the type of price that the consuming countries were willing to pay. It is not a case of the Community's absence.

Mr. Nigel Spearing (Acton) rose—

Mr. Godber

No. I have given way a great deal, and I must get on with my speech. I have been very patient and have given way at least five times.

Meanwhile, we have a new agreement of a purely administrative nature, the main purpose of which is to prepare for the subsequent negotiation of a proper agreement, possibly in 1975. I hope that the Community will join the new agreement—certainly we shall work towards that—and take part in this preparatory work. My right hon. Friend said this afternoon that that was the intention, and I confirm that that is so.

That brings me to the second issue which we are debating to-day—namely, the future of our own sugar industry. I shall deal first with the refining margin for our cane sugar refiners. The major port refiner has put out a great deal of publicity about this over the past week. I regard that publicity as misguided. It is based on a misconception, which I find very hard to understand, about the Government's attitude towards future negotiations, and it seems calculated to generate an atmosphere of crisis where no such crisis exists.

This is an important matter, and I think that I can best deal with it by setting the full facts before the House. I should add that the managing director of that company has since—indeed, since I prepared this speech—explained to me that he believes that there is a misconception, and I therefore hope that I can clarify the matter by what I tell the House to-day.

In January, after long and hard negotiations, the Community decided on an entry price for Commonwealth raw sugar which left a margin to cover the cost of refining which was little larger than the margin allowed to the beet sugar industries on the Continent. I could understand why other member countries took the view that a margin adequate for refining one kind of sugar should also be adequate for refining another. But that view was, nevertheless, mistaken. The cost of refining raw sugar in a port refinery is substantially higher than the cost of refining that raw sugar in a beet factory, where the fixed costs are covered by the production of refined sugar from beet by continuous process.

I therefore told the Council of Ministers in January that measures would have to be taken to ensure that the sugar which this country is committed to take during the remaining period of the Com- monwealth Sugar Agreement could be refined and marketed. Spokesmen, both for the Commission and for other member States, claimed that there would be a premium over the intervention price which would make up the shortfall to our refiners. I told them that I doubted whether that was so—I could not prove it at the time—but I said that if it did not happen, then, if we accepted the figure that was given, the United Kingdom reserved the right to make up the refining margin to the previous level by a national subvention.

Subsequently, in March, I told the Council that we should be making these supplementary payments to our refiners because events had proved me to be right. These payments, which have continued since then—and which I reported to the House at the time—bring the refining margin up to £17 a ton—the level which I considered necessary to enable the Government to honour their commitments under the Commonwealth Sugar Agreement.

In July, the European Commission told me that it thought that arrangement was incompatible with the Treaty of Rome, and that it would come before the European Court. I immediately raised the issue in the Council of Ministers. I explained the importance of this subvention to the honouring of our Commonwealth commitments, and the Council immediately and unanimously decided to authorise its continuance until the end of June 1974, that is, for the full period for which the prices of both raw and white sugar in the United Kingdom for the 1973–74 season had been fixed. It is impossible to go beyond that, because the refining margin is related to those prices, and those prices are fixed on an annual basis. That is why it is fixed up to that time.

That is the history of the refining margin so far. It is a history of utter determination on the part of the Government to ensure that the margin should be large enough to enable us to fulfil our obligations to Commonwealth producers. There is absolutely nothing in that history to justify our fear or suspicion of the Government's intentions for the future, and, frankly, I do not understand the tenor of much of what I have read in the Press during the last few days.

Mr. Heffer

Will the right hon. Gentleman explain whether, after June 1974, the intention of his colleagues in the EEC is to allow us to continue the arrangement that has been made? I ask that because they have pointed out that it is against the Treaty of Rome?

Mr. Godber

That intervention makes me sorry that I gave way, because I am coming directly to that point. It is difficult when Members seek to anticipate what I am going to say. I am sure that the hon. Member is seeking to help me, but I should like to get on with my speech if I may.

It may, I suppose, be said that the margin is not yet secure for the period after June 1974. I shall answer that as I have answered for the present position, by setting out the facts. The Commission's proposals for the importation of sugar from developing countries in and after 1975 suggest that 85 per cent, to 90 per cent. of that sugar should be reserved for the port refineries, and that the margin allowed for refining this sugar in those refineries should be higher than the normal refining margin to allow for the fact that refining costs are higher.

There will undoubtedly be lengthy negotiations before all the details are finally settled, but it is a major step forward that the Commission have now, and for the first time, recognised the need for a special refining margin related to the costs of port refining. I intend to do everything in my power to ensure that that special margin is fully adequate.

That leaves the period—to which the hon. Member referred—between July 1974 and the start of the new arrangments for sugar from the developing countries—that is, the eight months between 1st July 1974 and the end of February 1975. Protocol 17 of the Act of Accession specifically authorises this country to continue imports of sugar under the Agreement until the end of February 1975.

I have already made it clear that the Government are determined to ensure that they can fulfil their commitments under that Agreement. Given that the Council of Ministers has recognised the justification for the present subvention, and given that the Commission has appreciated the need for a special refining margin under the arrangements that begin in 1975, I find it inconceivable that we shall not be able to secure adequate arrangements for this short intervening period. But, at the time when I asked for authority for this special subvention to continue, I pointed out that discussions for the reorganisation of our sugar industry were proceeding, and that the outcome of those discussions could affect the position thereafter. I told the Council that in good faith, because discussions between the three companies were proceeding constructively at that time.

That in turn brings me to the question of the reorganisation of the refining industry. In recent years, the port refiners have refined nearly 2 million tons of sugar for sale in this country: about 1.4 million tons from Commonwealth developing countries, 335,000 tons from Australia, and about 250,000 tons of raw beet sugar supplied by the British Sugar Corporation. In addition, about 250,000 tons are imported for refining and reexport. This is a trade which is in no way affected by our accession to the Community and can continue.

One might suppose, from what some people have been saying, that the problems which the industry is now facing result entirely from our accession to the Community. That is far from being the case: the main problems already existed quite independently of our accession. First, there was still some spare refining capacity resulting from a decline in exports from their level in the 1950s. Second, the position of Australia, as the only developed country benefiting from the Commonwealth Sugar Agreement, had become increasingly anomalous and would certainly not have continued indefinitely. This is certainly the case and was recognised, as I reminded the House a little while ago, by the Labour Government.

Mr. Douglas Jay (Battersea, North)

The Minister quoted statements made at the time of the application to join the Community, but would he not agree that if there had been no question of joining the Community there would have been no question of phasing out the Australian supplies?

Mr. Godber

I do not agree with the right hon. Gentleman and I will tell him why I do not agree. As I said a moment ago, it has become increasingly anomalous that Australia as a developed country was getting the full benefit—and it is no good the right hon. Gentleman shaking his head, it does not change the position a bit. Australian Queensland sugar is getting the advantage of the special terms designed to help developing countries. Under successive Governments this had been acknowledged—and the Australians have always recognised this fact—that they have been getting the advantage of special terms designed to help the developing countries. This has been said on many occasions in the past. The Australians have never denied it. They have had this advantage over the years because their costs of production are much lower than those of the developing Commonwealth countries. This is the point. Therefore Australia is producing and exporting a large quantity of sugar at this time. In any case Australia would probably wish to refine it herself. She is refining large quantities of sugar at present.

Mr. Shorerose—

Mr. Godber

I cannot keep on giving way. I have given way a great number of times. I cannot continue to give way. I have explained the position precisely and it is perfectly well known by all those in the sugar industry. It could be totally wrong to assume that that quantity would continue "indefinitely". That was the word I used and that is the word by which I stand.

Lastly, as the Public Accounts Committee—including several hon. Gentlemen opposite—had pointed out, it was clearly wasteful and unecomonic to transport raw beet sugar from a beet factory to a port refinery and refine it there. It is far more economic to refine it as part of a continuous process at the beet factory. Right hon. Gentlemen opposite who served as Ministers of Agriculture must have known very well that these problems existed and that a solution to them would have to be found. That must have been the case before this Government came to power.

What is the position, then, on the future level of raw sugar supplies? The maximum quantity of raw sugar from the developing Commonwealth countries that could be available is 1.4 million tons. The Australian quota I would hope, as I have said, to see phased out gradually; but in time it must end. Because the production of unrefined raw beet sugar is so uneconomic, the British Sugar Corporation have started to convert their remaining raw factories to white sugar production. And in time we must expect all sugar beet to be fully refined in the factories.

For the present, however, I want to see the remaining production of raw beet sugar continue to go to the port refineries.

I am glad to say that, following discussions with me, the British Sugar Corporation has put proposals to the major port refiner that are intended to allow the whole of the coming season's production of raw beet sugar—around 150,000 tons—to be refined in port refineries. I hope it will be possible for the Corporation and the refiners to agree on terms for this, so as to keep up the refineries' throughput for the coming season.

But that must be a matter of negotiation between them as the basis of this sale. But eventually raw beet sugar will no longer be available and the problem would have had to be faced whether or not we had joined the Community. The effect of this and of the ending of the Australian quota is that at best the port refining industry will be able to look only to the 1.4 million tons available from Commonwealth developing countries, instead of the total of nearly 2 million tons they have refined in the past. This inevitably means that the refining capacity in this country will have to be reduced to match the reduced supply of raw sugar. I have never concealed this from the industry or from the many hon. Members who have written to me about it; and I believe the industry has long and fully recognised it itself.

The right hon. Gentleman asked me specifically about the possibility of expanding the importation of Commonwealth sugar. Those who understand the industry will know that certainly some of the Commonwealth countries have difficulty in maintaining their existing allocations. Some of them may be able to supply more, but not in the generality. They have not asked for this, and I believe that in sustaining their existing quotas this is the only reasonable basis on which they can work.

The essential question for us all—the Government and the industry alike—is how the sugar industry can best organise itself to cope with this inevitable contraction in port refining capacity.

Mr. Edmund Dell (Birkenhead)

It is not inevitable.

Mr. Godber

It is inevitable on the facts that I have given. However much hon. Members may not like to face up to them, these are the facts.

Mr. Spearing rose—

Mi. Godber

No, I will not give way. I have given way quite sufficiently.

The Government for their part have done their utmost to encourage the three companies—the British Sugar Corporation, Tate and Lyle and Manbre and Garton—to agree on a reorganisation of the industry which would equip it to face the future with confidence.

In my view, the requirements of the future point strongly to an industry with interests in both beet and cane sugar. I believe the port refiners share that view. A link between beet and cane sugar production would allow greater economy and flexibility in refining and distribution, and would thus equip the industry in this country to meet the competition it must expect from sugar industries in other member countries—industries which themselves have a competitive strength based on beet sugar.

Equally important reorganisation which linked beet and cane interests would make it easier to plan and implement—in an orderly way that took full account of the interests of the workers in the port refineries—the reduction in port refining capacity which, however much we regret it, we all recognise as necessary and unavoidable.

The talks between the companies have been long and complicated. That was inevitable. This is a complex matter. But on 8th August the three companies put their signatures to a document which set out an agreed basis for negotiation. I put it no higher than that—it was a basis for negotiation.

That basis depended to some extent on an indication of the Government's wil- lingness to help, and on 22nd August we gave the three companies an indication that we would be prepared to consider sympathetically proposals designed to facilitate agreement between them. The companies were asked to work out the magnitudes of the sums likely to be involved for them and for the Government, and this, I understand, they have independently been doing. All this represented—and I hope still represents—real progress towards an agreed solution of an intractable problem.

I was therefore extremely surprised to learn that one of the companies concerned should have put out statements which seem to me to ignore—and so by implication to reject—the whole prospect of early agreement on reorganisation. I can only express the sincere hope that those statements do not in fact bear that implication. I hope that it will still be possible for the three companies to reach early agreement, and I look to them to try their hardest to do so.

If instead the larger port refiners were to decide to go it alone, I believe—and this is my personal view—they would be turning their backs on their own best interests and on the best interests of their workers. I must point out, however, that they have not indicated to the Government that they no longer wish to go ahead on the basis of the memorandum of 8th August. Indeed, this morning Mr. John Lyle called on me, and, after saying that his preferred solution was a two-company one, he reaffirmed that nevertheless his company wished to continue discussions on the basis of that memorandum. That is the position reached so far in negotiation.

At this stage I must comment on the extraordinary advertisement that appeared in the Press yesterday. That advertisement was, I am sure, seen by all hon. Members. It says: Your sugar is at risk and goes on to say that As a direct result of Britain's entry into the EEC, you will pay three times as much for your sugar within two years.

Mr. Arthur Lewis (West Ham, North)

The Government said that prices would not go up.

Mr. Godber

That premise is totally wrong and therefore, not surprisingly, the conclusions are equally wrong.

Mr. Lewis

I cannot believe it. I do not believe it.

Mr. Godber

The whole advertisement is grotesquely misleading, and perhaps the hon. Gentleman will—

Mr. Lewis

The Government tell lies.

Mr. Deputy Speaker (Mr. E. L. Mallalieu)

Order. The hon. Member for West Ham, North (Mr. Arthur Lewis) must not bawl across the Floor of the House each time he is annoyed.

Mr. Godber

If the hon. Gentleman will contain himself, I shall tell him what the truth of the situation is. He might be glad to learn.

Mr. Lewis

I do not believe it. Will the right hon. Gentleman give way?

Mr. Godber

I shall not give way.

Mr. Deputy Speaker

Order. The right hon. Gentleman is not giving way.

Mr. Godber

I am seeking to give the House the truth of this matter, and the hon. Gentleman's interventions—

Mr. Lewis

The Government tell lies.

Mr. Godber

The hon. Gentleman's interventions do not help in this regard. It seems he does not want to hear the truth, but the rest of the House does.

Mr. Lewis

Lying Government.

Mr. Godber

The advertisement claims that the price is going up three times as much within two years. The truth is that we have agreed during the next four years to raise our price to the full Community price level.

Mr. Lewis

Nineteen per cent.

Mr. Godber

The present difference is £18 a ton, equivalent to just under one penny a pound. Over the first two years of transition, the rise due to entry into the Community is £7.40 a ton, equivalent to one-third of a penny a pound.

That is the true situation and the whole of this advertisement is wrong, and is based on one of the wildest distortions of fact ever put before the British public. [Laughter.] I am surprised that hon. Members think that amusing. It is totally incorrect. The figures have been set out and are beyond dispute. I think hon.

Members who laugh at it merely seek to cover their own confusion. I do not know whether they inserted the advertisement. In any case, the advertisement is wholly wrong and I repudiate it here. The most charitable conclusion I can draw is that those who inserted the advertisement had themselves been totally misled. I suggest that they now have a duty to insert a fresh advertisement which tells the truth, and the truth is what I have given the House.

Mr. Heffer

The right hon. Gentleman had better do that.

Mr. Godber

I have told the House the truth. This is a serious matter, and I am surprised that hon. Members should seek to encourage those who mislead the public in this way.

Mr. Stephen Hastings (Mid-Bedfordshire)

My right hon. Friend has made a great point of attacking this advertisement, for reasons which I entirely comprehend, but he is, surely, not asking the House to accept that this was put out by a clear intention of the management of Tate and Lyle, because that might be the implication.

Mr. Godber

I did not say that. I have not suggested that for one moment. I have taken the advertisement on the basis that it is there. I have repudiated the alleged fact in it, and whoever put it out is totally misconceived in what he is doing.

I turn now from publicity with which I totally disagree to something which I read in The Times recently with which I did agree, namely, Lord Campbell's letter to The Times which appeared last week. I observe that Lord Campbell, who has done so much for Commonwealth sugar over the years and whose views we all respect, said that the Commonwealth producers must not be at the mercy of their competitors. I agree with that sentiment. It is essential to have an efficient and viable refining industry in this country ready to take, and committed to take, the Commonwealth raw cane sugar available to it.

My own view, however, is that that purpose could best be served by having an integrated refining industry which has both port cane refineries and inland beet factories at its disposal. However, no suggestion of compulsion by the Government to achieve this or any other solution has ever been put forward. If the present companies do not wish to merge, that is for them to decide. But if they wish to retain their present position and status, the cane refining companies will have to face up individually to the problems of surplus capacity to which I have referred.

I repeat again, to make it absolutely clear, "If it is their wish". There has never been any suggestion of compulsion to amalgamate. All three parties to these discussions are free agents, answerable to their directors, to their workers and to their shareholders alike, and it is for them to decide.

Sir Elwyn Jones

Will the right hon. Gentleman indicate to the House what consideration the Government have given to the serious social implications for the port refining areas and their populations, bearing in mind that, unfortunately, they are already areas of unemployment? Has this aspect been considered, and what will be done about it?

Mr. Godber

The right hon. and learned Gentleman is right to call attention to that aspect. It is one of the factors which we have had very much in mind in the discussions about reorganisation. What we want is the best solution which does the minimum harm, but the proposals must come from the companies themselves. The Government have sought to help, and will seek to help, in the final solution of the problems, but it is for the companies themselves to say what they want and that is what I want them to do.

It will be obvious from what I have said that the motion reflects to a very great degree the Government's attitude and intentions. Therefore, I am not asking my hon. Friends to oppose it. To avoid any misunderstanding, I should like to make quite clear the basis upon which I say that. First and foremost, I accept the reference to our undertaking to import 1.4 million tons of Commonwealth cane sugar. It is, of course, true that that undertaking now has to be a Community undertaking, but it was first given to this House by my right hon. Friend the then Chancellor of the Duchy, and I accept that it is this Government's duty to ensure its fulfilment. I have no doubt that it will be fulfilled by the Community.

So far as the International Sugar Agreement is concerned, as a result of the lack of agreement in Geneva between the principal exporting and importing countries, that agreement is at present in abeyance. I hope that a new International Sugar Agreement will be established, although that is unlikely before 1975 at the earliest. If and when it is established, it will be the objective of this Government to secure the full and active participation of the European Community in a manner which will be consistent with our attitude to the continuing importation of Commonwealth sugar at a level of 1.4 million tons a year.

There was a reference to beet sugar production and a reference to … major accompanying changes in the sugar policies of the EEC", I interpret those as both being references to beet sugar production in the Community as a whole.

I must make absolutely clear that in accepting the motion I am not giving any undertaking to cut back on beet sugar growing in the United Kingdom. It is not expansion of beet sugar growing in the United Kingdom that has caused our present problems. On the contrary, this country has for many years kept back beet production to ensure continued entry for Commonwealth sugar. With the phasing out of the Australian quota, growers in this country are entitled to look as a minimum for the major share in that quantity. Therefore, I make clear that I do not interpret the acceptance of the motion as in any way limiting the Government's right to look after the rights and to protect the legitimate interests of our own farmers, as well as our own workers on the farms and our own workers in the beet sugar factories.

The quotas for beet production in the Community will be a matter of much argument in the coming months. No one can say what the ultimate outcome will be, but it will be our objective to secure a satisfactory balance between production and consumption against the background of the continuing importation of Commonwealth sugar on the basis that I have set out. So far as the workers in the industry are concerned, it will certainly be the intention of the Government to give such help and advice as they can in resolving the problems that at present exist.

But, equally, the Government look to the managements of the three major refining firms to work out together the most sensible long-term future for the refining of sugar in the United Kingdom in the interests of all those involved in the industry, from producer to consumer. There may be differences of view on the method of implementation, but I believe that the broad objectives of both sides of the House on this matter are the same.

I have tried this afternoon to set out the facts on the whole complex of issues affecting the future, first of developing countries who are members of the Commonwealth Sugar Agreement and, secondly, of the sugar industry in this country. I have tried to set forward the facts and have tried to offset the misunderstandings which have arisen. The Government's aims are to ensure—as I am confident we can—a future market at an acceptable price for 1.4 million tons of sugar from the Commonwealth developing countries; and to secure the best and most sensible outcome of the discussions that have been going on for many months now on the future pattern of the refining industry in this country.

A satisfactory and sensible outcome is necessary in the interests of the sugar producers, both in the Commonwealth and here at home, in the interests of the refining companies and their workers, and in the interests of the consuming public as well.

5.42 p.m.

Mr. Frederick Lee (Newton)

Some of the right hon. Gentleman's utterances may have been misleading, but the latter part of his speech made it abundantly clear that there will be large-scale redundancies in the areas of the six refineries of sugar cane, so I believe that this is a serious economic problem.

Although the Government have accepted the Opposition's motion, I am not at all sure that we both mean the same thing. Naturally, those of us who have refineries in our constituencies look, first of all, at the effect upon our own constituencies. I have in my constituency the Sankey Sugar Works at Newton-le-Willows, which refines some 170,000 tons per annum and employs some 600 people. Those works are on the very edge of the Merseyside development area. It is ironic that it has never had any assistance from development area funds, owing to the fact that it is a mile or so on the wrong side of the dividing line, but it has had to compete with the giant Tate and Lyle which gets all the advantages of development area policy because it is inside the Merseyside development area. While we are not in any way worried about efficiency and believe we have shown how efficient we can be, it seems on the facts given to us by the right hon. Gentleman that there is cause for grave apprenhension and that we are faced with the probability of redundancies.

If I have a criticism of the motion, it is that it over-emphasises the 1.4 million tons. The right hon. Gentleman explained that if the French agree—as he hopes they eventually will—we may get 80 per cent, or so of the 1.4 million tons, in contrast to approximately 2 million tons per annum upon which we base our industry. Therefore, there appears to many of us to be a fearful degree of redundancy involved. Although we take the right hon. Gentleman's word that he thinks the French will be defeated, we have no proof as yet that that will happen. The motion finishes, after referring to the 1.4 million tons of cane when the present Commonwealth Sugar Agreement ends, … and to insist upon major accompanying changes in the sugar policies of the E.E.C. The right hon. Gentleman has told us how he wants to protect the sugar beet industry of this country, but we are not concerned only about that. Unless he interprets those last words in the way in which I interpret them, there will be a continuing expansion in the production of sugar beet in EEC countries other than Britain. Therefore so far as the developing areas of the Commonwealth are concerned, there can be no hope of getting a guarantee even of 1.4 million tons.

I should like to quote from this fine publication which the World Development Movement has sent to us: First and foremost in an effort to show that the enlarged Community can (and therefore should) be self-sufficient in sugar, production has expanded astronomically. Overall beet acreages expanded by 5½ per cent, between 1970–71 and 1972–73; in France alone the figure was 13 per cent. Coupled with favourable conditions this led in 1971–72 to a 17 per cent. increase in overall Community production leading to a surplus of 4.4 million tons. At the same time the Community's internal requirements are actually falling. This publication goes on to say: Furthermore, the French have declared their intentions of increasing beet production by at least 600,000 tons by 1975. I hope that the Minister will tell us precisely how he interprets the last few words of this motion. The question is not what happens to the British beet industry. The question is whether we are going to connive at the vast increases in the production of sugar beet which will continue certainly throughout France and probably throughout the whole of the EEC countries. That is the kind of thing to which the House should address itself.

In other days one had some responsibility for the developing countries. I signed agreements with Barbados and Mauritius. Although great blocks of money have been expended in trying to grow secondary foodstuffs in those areas, the success we have achieved has been very limited. The dependence upon sugar is almost 100 per cent. The irony of it all now is that whilst the nations of Western Europe are telling us that they intend to go on expanding the acreage necessary for the production of beet sugar, we are all moaning about the vast increases in the prices of beef and cereals throughout the world.

The developing nations from whom we take the sugar cane cannot possibly begin to solve that problem. But we can. A great deal of the acreage which we are discussing, if put under cereals and if used for the production of beef cattle, could materially affect world prices of those commodities to the advantage of nations like ourselves. Therefore, it seems to me that in the planning of food production this is lunacy at its worst.

As the producers of sugar cane face this crisis—and the crisis is growing as sugar beet production in Western Europe increases—we shall probably be asked to increase aid to those areas instead of taking sugar cane which benefits us, while on the other hand we are also asked to pay increased prices for beef and cereals in order that we can subsidise wealthy French farmers who have got about the strongest lobby within the EEC and who intend to continue expanding the production of beet sugar.

It seems to me that from now on the battle will not be confined to the question of the beet sugar production of this nation. We would be failing in our duty if we did not pursue within the EEC the problem of getting a marked reduction in sugar beet production.

I was saying that no matter what happens now, on the facts and figures produced by the Minister we in the refinery areas of Britain now face pretty heavy redundancies. Some of us are in areas which, although not within development areas, depend heavily for labour from the development areas. Indeed, I should have thought that a large percentage of the people who work in the refinery in Newton-le-Willows come from St. Helen's and Widnes which are inside a development area.

I think it is a defeatist attitude to submit to a position in which we accept a vast reduction in the imports of our sugar cane, knowing that that is bound to mean a correspondingly large problem of unemployment in certain areas of Britain, whilst we accept without a struggle the increases in sugar beet production within the nations of the EEC.

I was told that once we were inside the Community we would be able to influence decisions which were taken in the Community. If this is an example of the sort of influence that we are wielding I begin to wonder where it will all finish up. There is a certain amount of honour at stake for Governments of this country. When we negotiated so-called political independence for these nations we all knew that for long they would be dependent economically upon us. When I negotiated associate membership for the Caribbean States I knew that they were bound to depend for economic sustenance on us for a long time. Thank heaven there is no substitute for growing bananas in the EEC. If there were, they would probably try that as well.

Therefore, it is encumbent upon us, whether we hold ministerial office or not, to honour agreements not only in the letter but in the spirit in which they were conducted. I am certain that those nations would never have accepted the constitutions which we created for them had they known that we would connive at a vast increase in beet sugar production.

5.53 p.m.

Sir Robin Turton (Thirsk and Malton)

I am sure that nobody in the House has any doubt about the honourable way in which my right hon. Friend the Minister of Agriculture, Food and Fisheries has spoken for the interests of Commonwealth producers and British beet farmers in the negotiations. However, I regret very much the remarks which he made about the Queensland farmers. If the Commonwealth Sugar Agreement had been allowed to continue, remembering that but for the EEC negotiations it was for an indefinite duration, there is no doubt that the Queensland farmers would have been kept in as members of the Commonwealth.

If one recalls the history of the Commonwealth Sugar Agreement, one will be aware that the Australians have been extremely helpful in reducing their negotiated price quotas to help the poorer developing countries, regarding their membership of the Agreement as a partnership. My right hon. Friend's words this afternoon will be misconstrued in Australia, and I hope very much that in due course he will correct that impression.

Mr. Godber

I very much hope that my words will not be misconstrued. They were not in the slightest degree intended as being hostile to the Australian producers. I was dealing with the position as I saw it and I was reminding the House that the Commonwealth Sugar Agreement was specifically directed towards helping the developing Commonwealth. Australia has known for some years that there will be some degree of anachronism. I do not think they would wish to take advantage of the Commonwealth sugar price. That was the point I was seeking to make. I am supporting them, and I will continue to support them, to the hilt in finding a satisfactory solution on the phasing out. I am in close touch with them.

Sir Robin Turton

That shows the unwisdom of giving way. I had hoped that my right hon. Friend would make a recantation, whereas he has overemphasised the point.

The main problem is that, unfortunately, with all our honourable intentions we have in recent months been outsmarted by the French beet sugar lobby. The first time this happened was in the course of the negotiations when the present Minister for the Environment complacently agreed to Protocol 17 of the Treaty of Accession, which has been referred to with pride by my right hon. Friend. The Protocol contains, in paragraph 3, the following phrase: The price at which the sugar in question is marketed in the United Kingdom "— that is, the cane sugar price— shall be fixed at a level such as to allow the quantities in question effectively to be marketed without prejudicing the marketing of Community sugar. In other words, we have to adjust the efficient, relatively cheap refined cane sugar so as to ensure that the beet sugar gets the same price. As a result we pay, under Protocol 17—and this has not yet been mentioned in the debate—a levy which would amount, under the arrangements of the EEC, to £11.10 a ton on all sugar. Therefore, but for Protocol 17 the British housewife would be getting the sugar in the shops cheaper by £11.10 per ton.

Mr. Godber

That is not very much.

Sir R. Turton

The Minister says that it is not very much, but it would bring prices down.

This is one of the ways in which the French beet sugar lobby has outsmarted us. My next point concerns the refining margins for cane sugar. The Minister went gallantly to Brussels saying we must have a refining margin of £17 per ton, but he was defeated. He returned with a refining margin of £11.50 per ton and the difference has to be made up by the subvention. This means that whereas we pay £11.10 in levy the British Government reduce that by £5.50 a ton subvention. This is an extremely unhappy state of affairs. It is no good crying about the past. We must look to how we are to present our arguments in the Commission in the future.

I turn now to the essential matter of the cost of production. To produce one ton of white sugar from cane costs £42 while from beet the cost is £53 per ton. This figure refers to beet in the United Kingdom while for beet in the EEC the cost is £64.49 per ton. That is the differential price on production.

What we are considering today is the most efficient and the cheapest method of production. This is the essential livelihood of many developing countries, involving the whole of their economy. Unfortunately, under present arrangements in the Community there is no proper cane refining margin. This efficient sugar is not being treated favourably and this state of affairs cannot be allowed to continue. It is no good talking as my right hon. Friend does about integration of the industry. That is merely a device by which the losses on the refining of cane are balanced by the gains on the refining of beet. That will help no one.

My right hon. Friend gave us the hope that he intended to attack this problem when we got to the definitive régime in 1975. It seems to me that we must get into this early in order to persuade the European Community to give the £17 per ton margin for which my right hon. Friend argued and on which he was defeated earlier this year.

Before the conclusion of this debate, I hope that we shall be given a little more information about what happens to the cane sugar that is refined by France and what is the refining margin for that cane sugar. This is a quite separate position. The cane sugar refined by France comes from metropolitan France d'outre-mer and is regarded therefore as being in a privileged position so that it does not have to pay any levy. But what is the refining margin on it? The figures which I have been given show that the refining margin on French cane sugar from Departments d'outre-mer amounts to something in the region of £22 a ton. Taking into account the fact that as most of it is processed into lump sugar, it receives the special £5.70 for the lump sugar premium, it is important that the British Government should bring out those facts so that we know exactly where we stand.

If we are to honour the assurances that we gave the developing countries about the 1.4 million tons it is necessary to see that the refining margin for that cane sugar is maintained at a reasonable level. Therefore my first request to the Government is for an assurance today that so long as Protocol 17 is in existence, which is until the end of February 1975, they will continue the subvention of £5.50 per long ton to the refiners so that cane sugar may continue to be refined.

My second request is that after that when we get into the new sugar régime in the Community, my right hon. Friend will battle to secure that cane sugar should not be put at a disadvantage against the French beet sugar lobby which at present is winning all the time.

During the recess, I spent some time attending the Commonwealth Parliamentary Conference here at Westminster. Delegates came from the whole of the Commonwealth saying, "Sugar is our life blood. We look to the British Government and we trust them to see that their undertakings are carried out." Probably the most touching plea came at the end of the one day's debate from the delegate from Western Samoa. He explained that sugar was one of his country's primary products. He said: From our point of view, on the other side of the world, this is a strange mésalliance. However, we know that it is in Britain's interests to foster this new union, and it is up to us, who are all pragmatists, to support Britain in her entry, knowing full well that she will not desert us. We must not desert our sugar producing partners in the Commonwealth. I ask the Government to negotiate, determined to defeat the French sugar beet lobby in the months to come.

6.5 p.m.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

I agree wholeheartedly with the closing sentences of the right hon. Member for Thirsk and Malton (Sir Robin Turton), and I believe that it is appropriate that the Government should have decided not to resist the terms of the motion tabled by the Opposition because it is right and proper and, I hope, helpful for this House to be unanimous on this matter in advance of the coming negotiations.

I want to take issue, however, with the right hon. Member for Stepney (Mr. Shore). I consider this debate to be very much a secondhand one. The real debate on these issues is taking place in Europe and not here. The right hon. Gentleman is happy to quote M. Chirac and to ask the Minister what he said to him. But that is to acknowledge that the real discussion is being held in the Council of Ministers with the subsidiary discussion in the European Parliament.

The gravest anxiety of my right hon. and hon. Friends who, with one exception, supported Britain's entry into the EEC about the pattern since we went in is that not nearly enough priority is placed in the Community upon the need to develop democratic institutions more effectively to debate these issues. That was the point of my earlier question to the Chancellor of the Duchy of Lancaster. It is not good enough to discuss EEC affairs in little ad hoc debates or in five-minute statements from the Chancellor of the Duchy about a miscellaneous shopping list of reports. It does not do the subject credit, and I hope that the Government will take the initiative in elevating in importance the need to develop democratic discussions in the EEC so that we may have proper debates where it matters rather than in this House in this secondhand fashion.

During Business Questions last Thursday it was interesting to hear the Leader of the Opposition asking for assurances about a debate before Europe's regional policy consolidated itself. On the very same day the European Parliament was debating the identical subject without the benefit of representation from the British Labour Party. That attitude does not make sense if we are trying to influence the future policy of the Community.

I pay credit to the hon. Member for Saffron Walden (Mr. Kirk), who as leader of the United Kingdom delegation in the European Parliament is one of the few people in British political life putting forward concrete suggestions to try to get to grips with the Council of Ministers and to improve the ability of the European Parliament to check what the Council is up to.

That is not to say, however, that this is not an important debate. The Liberal Party has always taken the view that the EEC is not what the pessimists have held it up to be, a rich man's club only interested in the welfare of its member States and uninterested in the affairs of the world. We have tended to take the optimist's view that its role should be to use its economic power and potential to assist the development of less fortunate parts of the world. That is a crucial and important principle by which we have always stood in our party conference resolutions and in our support for Britain's joining the Common Market. Therefore when we discuss the specific topic of the Community's attitude to sugar it is very much a test case. That is why it is so important.

The continued flow of aid which the EEC has given to the under-developed countries is important. But far more important could be the influence that the Community has to keep up the price and quantity levels of imports from primary producing countries. That should be a prime objective in the policy of the EEC. I welcome the assurance that the Minister gave at the end of his speech about accepting the motion tonight—that it is not part of the Government's intention to make any further cut-back in the growth of sugar beet in this country.

However, we must make it clear that, in this country in recent years, we have never had any consumer interest in growing sugar beet. It has been an agricultural interest and it is in the interests of that industry that a certain quantity should be grown partly because of its value as a rotation crop. That has not been the attitude of some of our EEC partners. Where we must try to get to grips with them is to convince them that it is wrong for them to regard the production of sugar beet in the conditions of the world today as a means of making money and to act as a net exporter of the product, in view of putting the livelihood of so many territories, Commonwealth and non-Commonwealth, at risk. In this case, the interests of our sugar-refining workers and of vital employment on the Clyde, Merseyside and the South-East coincide with our proper interest for the welfare of the under-developed world.

It is important that we remember the precise words used by the then Chancellor of the Duchy of Lancaster during negotiations for entry to the EEC when he told the House that the Six, as they then were, had accepted "a specific and moral commitment". These are strong words. Much fun has been made of the phrase used in the French translation. I remember the right hon. Member for Stepney (Mr. Shore) who is, as usual, paying no attention now, making much fun of it. But in terms of the commitment that we were all given to understand and which, more important, the sugar producers accepted in discussions, that agreement must be held to now. That is why the backing of the House is so important.

The right hon. Member for Stepney suggested that the amendment that the Labour Party moved during the European Communities Bill was the same as this motion. It was nothing of the kind. It was an amendment that we as a party found totally unacceptable. It sought to inflict on the Communities the Commonwealth Sugar Agreement as it stood in 1971. While we may continue to disagree about that, what I objected to about his statement was that it was the fault of the Liberal Party because the amendment was defeated by only eight votes. I am well aware that in the present state of political nervousness, an outbreak of the plague would be likely to be blamed on the Liberal Party. He must not accept these glib research documents from Transport House without checking the arithmetic. If he looks at the Division list in HANSARD, he will find that if every hon. Member of the Liberal Party had voted against the amendment it would still have been defeated. Let us have no more of that canard in the debate. The critical point for the Community in this Sugar Agreement is that it is a test case for the whole of the Community's attitude towards the whole of the under-developed world. It is in that spirit that our party wants to support the Government in their negotiations.

6.14 p.m.

Sir Douglas Dodds-Parker (Cheltenham)

I entirely support the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) in his point at the end to which I shall refer again. I am glad that, as he said, the whole of the House can support the motion, because it is important at this time that we should do so.

I am glad that the right hon. Member for Stepney (Mr. Shore) has shown some resistance to the usual temptations to use a constructive debate for merely bashing the Community. Spending a certain amount of time as I do in Europe, I find it tragic that that great party opposite which did so much in the 25 years after the war to help build up Europe, should be so often narking against anything to do with European co-operation.

I support my right hon. Friend the Minister of Agriculture, who made an excellent speech. He is in the middle of a difficult negotiation. He said there is nothing in the motion which the Government is not trying to achieve by negotiation. I share his confidence that he will be able to do so. I believe that this is a subject of the greatest importance, to both producers and consumers, to the production of beet and cane from developing countries and to employment, both overseas and in this country. It can be resolved without using it as yet another way of attacking the Community. That does not mean, of course, that there is not plenty of room for negotiation within the Community, and that is what my right hon. Friend is trying to do.

In the years after the war, I had the honour of being Chairman of the then British Empire Producers' Organisation. In 1948, my Australian deputy started talking about an agreement between the four main sugar-producing areas—Australia, South Africa, Mauritius and the West Indies. Having roughed out the heads of agreement—it took quite a lot of massaging to get that lot to agree, I can assure the House—we took the proposal to two Members of the then Government, who I am glad are still with us—the right hon. Members for Leyton (Mr. Gordon Walker) and Middlesbrough East (Mr. Bottomley) who then, with other departments, turned it into the Commonwealth Sugar Agreement in 1951. We thought then that it might last five, possibly 10, years. None of us believed that, nearly a quarter of a century later, it would be a standard that had stood the test of time.

At that time, I had had the privilege of representing for 15 years an agricultural area with a small but important beet crop. I know and respect the beet sugar argument very well, from both the agricultural and the economic point of view. Sugar has therefore played an important part in my life. I am delighted that last week I had the privilege of being invited to become the rapporteur for sugar at the European Parliament. I took this as a tribute not to myself but to the fact that my country—I regret the absence of those hon. Members opposite who might have been there to help—was a member of the development committee of the Parliament. We had our first meeting yesterday in Brussels in committee.

In the circumstances, it would be wrong for me to anticipate any recommendations of the report that I might be presenting until I have further discussed it and agreed its contents with the other members of the committee. But I can say that there is great good will. I am sometimes astonished at the implication which is given in this House, particularly from the Front Bench opposite, that there are a lot of continentals trying to do this country down. I can assure those hon. Members and some of my hon. Friends below the Gangway that the atmosphere on this issue was one of great good will between parliamentarians and the representatives of the Commission who were present.

I hope that I will not embarrass him by mentioning his name, but I think that our discussion was very much helped by the presence of the noble Lord, Lord Campbell. It pleased me in particular because he was one of the West Indies representatives in the late 1940s when we first achieved the Commonwealth Sugar Agreement. He made an excellent and well-reasoned exposition of the Commonwealth case and everyone was delighted that he had troubled to come to Brussels to put it before the committee. One point that pleased members of the development committee was Lord Campbell's personal record with regard to improvements in the social and economic conditions in the cane sugar-producing areas.

I am therefore confident that, with general good will, we can reach agreement between the Council of Ministers, which of course takes the final decision, and the Commission and the beet and cane producers, including the refining interests, but it will take some time, of course.

I was very much encouraged by the details which my right hon. Friend gave today, particularly about the 335,000 tons of Australian sugar. I regret that it will not be coming from Australia any more but, from talking to the Australians I know, they realise that, as a wealthy developed country, they cannot expect to be given the benefits that are given to the developing countries.

In the meantime, if those hon. Members who have not done so would study Memorandum No. 73/1177 of 12th July from the Commission, they would see clearly the lines on which the Commission seeks to resolve this complicated problem. I will say no more than that, but I am sure that my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) has studied it with the care that he always gives to problems affecting Commonwealth production. It gives an excellent analysis of the problem and puts forward certain suggestions which are receiving widespread support.

Sir Robin Turton

Does it give the actual cane refining margin?

Sir D. Dodds-Parker

Not in detail at the moment, no, but these are the areas—[Laughter.] That is a typical instance, with respect, of how the good faith of the Commission is called into question in an intervention. I am sorry that my right hon. Friend should have done that, because it is not characteristic of his usual constructive outlook. But I can assure him that every effort is being made by those concerned, including my right hon. Friend, to work on that sort of detail.

Mr. John Roper (Farnworth)

Does the hon. Gentleman not agree that it is made clear in paragraphs 24 and 25 of the memorandum that the Commission would accept that there would be a higher refining margin for cane sugar and particularly for that cane sugar refined in port refineries?

Sir D. Dodds-Parker

Sufficient detail is given to show the general attitude of the Commission to this problem. I am in a difficult position, because I cannot anticipate anything that I may say in a report. But I take the point and I hope that the hon. Gentleman will find, that, when this is finally resolved, it will come out satisfactorily.

Beyond this, I believe that, just as the Commonwealth Sugar Agreement of 1951 proved the forerunner of the International Sugar Agreement of the late 1950s, so we have a chance now to produce a European sugar agreement which could set standards for the next international sugar agreement which obviously must come. At present, prices are high. They were high in the late 1940s, in the time of the Paley Report. We are going through such a process today, but the natural resilience of the free enterprise system all over the world overcame that shortage and I believe that it will do the same today. I believe that we will see a fall in price; when that happens, there will be more inclination among certain countries to reach an international agreement.

The hon. Member for Roxburgh, Selkirk and Peebles said that this matter was a test of the Community's good will towards the developing countries. There are eight items of primary production in which the Community wants to give stable export earnings, of which sugar is the first. If we all work together and achieve a satisfactory outcome for sugar in the terms set out in what might be called this commodity agreement, we can then move on, possibly not on exactly the same lines, to the seven other commodities listed. It is to this "trade rather than aid" approach that the developing countries are looking forward.

I hope that, with our colleagues in the Community, we can work towards a decision on these lines which will benefit these countries as well as giving us a stable and reasonable price. Unfortunately, these negotiations, like so many others, are not between like and like but are basically between the economic and agricultural benefits of beet and the political and moral side of importing cane. If this country, which has been accepting the political and moral responsibility of importing about 65 per cent, of its sugar in the form of cane and restricting its domestic beet production, asked the Community to import about 15 per cent, of cane sugar and take the rest from beet production, it would give a good lead to the rest of the world and benefit all producers and consumers as well. I wish my right hon. Friend the best of fortune in negotiating an agreement on those lines.

6.25 p.m.

Mr. Frank Marsden (Liverpool, Scotland)

It is inevitable that a debate of this kind should be filled with statistics and figures. But for me the debate is about jobs; not jobs for the boys, but the livelihood of many people on Mersey-side and elsewhere.

On Merseyside at present we have 49,000 people who are unemployed, around the great refinery of Tate and Lyle. That is why the anger is slowly but surely building up. I am sorry that the Minister has left the Chamber. I have heard him described as an honourable man. I am sure that he is. But I was a little angry on 26th September when a delegation met the Minister and asked a specific question about reorganisation. I think that I can say, with modesty, that I have a fairly good memory. On that occasion the delegation was told, concerning the reorganisation, that the firms were doing a minuet and hoped to have it finalised by the end of the year. There was no mention of the meeting on 8th August of heads of the sugar refining industry. The Minister would have known of that meeting. Why did the Minister not tell the Members of Parliament on that delegation that such a meeting had taken place and that an agreement had been signed? Why did he remain silent? The Minister need not have told us, but I thought that he would have done and should have done. Perhaps that was a sin of omission.

Like many hon. Members on both sides of the House, I feel that we are simply not in the picture about many issues. There have been rumours and counter-rumours, and sometimes even lies, over the many issues involved. We have one story from the Minister but a different story from Tate and Lyle. I warn the workers' action committees not to be so involved with management at a time when it may be necessary to fight management. The workers are being used by Tate and Lyle to put pressure on the Minister so that the company can cut back and do precisely what is wishes. Tate and Lyle is now saying, a little late in the day, that redundancies are inevitable. The seeds of all this were sown in the past. The sugar workers of Liverpool think that the Government and Tate and Lyle are selling them down the river. Tate and Lyle will do what is in the best interests of its shareholders. As a good company, why should it not do that? But such action may not be in the best interests of the working people of Liverpool.

It has already been said that 1.4 million tons of imported cane sugar means redundancies. The workers of the cane sugar refining industry in Liverpool are in this desperate situation simply because the Tory Party decided, without their consent, to throw in Britain's lot with Europe. In the early days when the Labour Party was in power, the workers were being told that entry into the EEC would mean that the industry would be given boundless opportunity, but such has not been the case. The result has been the opposite. Our entry into Europe has meant that the fate of workers in Liverpool is in the balance, whether that be through reorganisation of the industry, rationalisation, or cut-backs in production. The workers of Liverpool fear for their jobs. They fear for the closure of the great Liverpool refinery. That is how far their fears go.

I should like to remind the House of what would be the result of the closure of such a refinery. Tate and Lyle is situated about one mile from the banks of the Mersey. There would be a permanent loss of about 4,000 jobs. This total of 4,000 is made up of over 2,000 jobs in the refinery itself and 2,000 divided among engineering, transport, shipping, technology and commerce and the work that takes place on the periphery of all great refineries.

The refinery uses 100,000 tons of coal at a cost of £750,000. The National Coal Board would not be pleased to lose such a customer. It uses 250,000 gallons of gas oil and 35 million cubic feet of town gas. The Mersey Docks and Harbour Board, which itself has financial worries, is sick at the thought of one day losing a customer that pays dock dues to the tune of £841,000 per annum.

On Merseyside—I can use this expression without offence—we run like hell to stand still. My constituency would not recover from such a blow, if it should happen that this great refinery closed. This is a real fear. It could easily happen in 1975. We cannot allow it to happen. In any home in my constituency one will find that if no member of the family works at Tate and Lyle's someone once did work there. They depend on Tate and Lyle a great deal for their standard of life.

It would take Merseyside a very long time to recover from such a blow. The workers have no wish to indulge in an aggressive public attack on the Government, but they feel that more pressure must be applied in Brussels. They feel that not enough pressure is being applied in Brussels and they want much more on the question of sugar. They are demanding more. The Government must find a fair and acceptable solution to this problem.

We have had some statistics in the debate and I hope that hon. Members will not mind a few statistics from me. The best cane sugar could leave the factory gates at £5.60 per ton cheaper than the best beet sugar, but for the EEC levy. The cane sugar refining industry is being strangled through no fault of its own. Surely the Tory Party must consider that a crime when the cane sugar refining industry fulfils all the ideals of true blue capitalism insofar as it makes a profit and is efficient.

There is also talk and rumour that m the future we in this country will eventually move to beet refining exclusively. The consequences of such action would be dearer sugar. I am informed by the Tate and Lyle workers action committee that it has discovered that it would cost £13 per ton more to bring best beet sugar from France than to fetch cane sugar from Mauritius. We cannot obtain from beet sugar the various syrups that are obtainable from cane. We would have no golden syrup or treacle. Many of our special brewing sugars would be lost. On a lighter note, we could not produce brown ale.

Exclusively beet sugar refining would bring wholesale redundancies in British cane refineries. The Liverpool social case is massive. When we saw the Minister on 26th September we asked him a question. It may have been ambiguous, but this was the way it was phrased. We asked whether he envisaged any subsidies, in any form whatsoever, to be used by Her Majesty's Government to keep the cane refinery going on Merseyside in the interests of providing work in the area. The Minister could have replied in 20 different ways, but he said that he thought that the present redundancy payments scheme was quite adequate. That reply is not good enough for the workers of Liverpool. More pressure must be applied in Brussels and the Government must find a fair and acceptable solution. The workers of Tate and Lyle and of Manbre and Garton appeal to the Government.

6.34 p.m.

Mr. Tim Fortescue (Liverpool, Garston)

It is very pleasant to make my first speech in this Parliament and my maiden speech from the Government side of the House on an occasion when I am able to congratulate the Government on their great wisdom in accepting this impeccable motion from the Opposition, and to know that the very wise body of men in the Government Whip's Office have not lost their cunning.

There is only one matter which I should like to put to my right hon. Friend the Minister of Agriculture, Fisheries and Food before he goes to Brussels to argue the case with the unanimous support of the House. We are urging him to do what I am sure he would have done in any case. I remind him that cane sugar is a far more economic way of growing sugar than the growing of the sugar beet. Cane sugar produces up to 50 per cent, more than beet sugar from each acre of land. It is not in the interests of the world, with the present world food shortage which will continue as long as the standard of living continues to rise, to produce beet sugar rather than cane sugar. I hope that in any discussions and negotiations which my right hon. Friend has he will bear that basic fact in mind, quite apart from the accusations of EEC horse trading.

The proposed reorganisation of the refining and processing industry has been referred to by many hon. Members but it has not yet been examined under a strong light. The result of the campaign which has been waged by the various interests in the sugar industry during the last few days, which seems to have continued for a long time, is that many people have learnt with a considerable degree of surprise that not only does the British Sugar Corporation have a monopoly of the processing of beet sugar but the Government have a 36 per cent, interest in the British Sugar Corporation.

That is a controlling interest, because none of the other shareholders holds any significant proportion of the shares. The Government appoints the chairman and either two or three non-executive directors. The corporation is a Government-controlled body. I ask myself, and I should ask my right hon. Friend if he were here, how it is that after three years of Conservative Government we have a monopoly position in the processing of beet sugar and a Government interest in a capacity which not even the Opposition Front Bench would call one of the commanding heights of the economy. [HON. MEMBERS: "Oh!"] I think not. Nevertheless, that position is allowed to continue. I was rather alarmed recently by an answer which my right hon. Friend—I am delighted to see that he has re-entered the Chamber—gave to my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton). He was asked whether he would countenance a monopoly position for the whole of the British refining and beet sugar processing industry. My right hon. Friend replied, as far as I can remember, that there was a near-monopoly position. He seemed to imply that that was not a matter which he regretted very much. He seemed to be prepared to accept a greater degree of monopoly in this sphere.

I am opposed to monopolies in any shape or form. I know that there are Opposition hon. Members who accept monopolies provided that they are good nationalised industries. They accept monopolies provided that they are monopolies of labour and not of capital or market. However, many Government Members and, I believe, many Opposition Members do not like monopolies and their implications. There will shortly be introduced strict anti-monopoly legislation. It seems strange that we should continue with a position in which the British Sugar Corporation has a monopoly of the processing of beet sugar.

We have heard today that the industry will be reorganised. Can we have an assurance that the fact that the Government have a large and a controlling interest in the processing of beet sugar will be examined carefully?

Many interests have been mentioned as being significant in the future of the sugar industry, including the interest of the growers in the Caribbean and in the developing Commonwealth. The interest of the housewife and the profits of Tate and Lyle have been mentioned as being much in need of protection. But one group of people who are particularly affected by the reorganisation of the sugar industry has not been mentioned. I must declare an interest, as I have recently been appointed the Secretary-General of a new body called the Food and Drink Industry Council. The function of the council is to speak on behalf of the trade associations in the food and drink industry. I hope that I shall be able to represent them in Whitehall and in Brussels. Of course, I shall not be able to represent them in the House because here I represent my constituents and no one else.

The large buyers of sugar in Britain are mainly the big food companies, although the drug companies are buying more and more. The interests of the big food companies who buy refined sugar in large quantities must be seen to be protected when the future of the refining industry is discussed. If there is to be a monopoly of refining and processing, and if one body is to have complete control of that activity, it is clear that those who buy large quantities of sugar will be in a much weaker position vis-à-vis the suppliers of sugar than at present. I should not like it to be thought that it is only the producers and processers who have an interest. There must also be considered the users of sugar.

The hon. Member for Liverpool, Scotland (Mr. Marsden) dealt eloquently with the question of possible redundancies in Liverpool and Merseyside. I hope that in the reorganisation of the sugar refining and processing industry to which my right hon. Friend has referred, which he has implied is now very much in the hands of the three companies concerned, it will be possible to take into account, when the companies' proposals are considered, that of the three large centres of sugar refining two are in areas of high unemployment whereas the other centre is in the South-East of England where the employment situation is much better.

If redundancies are inevitable, as my right hon. Friend seems to have indicated they are, I hope that it will be possible for him and the companies concerned to take into account the social factor.

Sir Elwyn Jones

I have the privilege of representing the constituency which includes the Tate and Lyle refinery in Silvertown. Is the hon. Gentleman aware that that is an area where a large bulk of the industry has gone away? It is an area where there are many empty factory spaces and where worry about unemployment is serious.

Mr. Fortescue

I am well aware that the right hon. and learned Gentleman is as conscientious in protecting the interests of his constituents as any hon. Member. What he has said is undoubtedly true. I am sure that he would not have said it if it were not true. There is, however, in the South East of England a far healthier employment situation than in Merseyside or on the Clyde. If there is to be any choice between where the sugar refining capacity should be closed. I hope that the social aspects of the unemployment situation on the two rivers of the North-West will be considered perhaps in preference to the river in the South-East.

6.43 p.m.

Dr. J. Dickson Mabon (Greenock)

I do not know for how long the hon. Member for Liverpool, Garston (Mr. Fortescue) has served in the Whips' Office. He has described his speech as his maiden speech. It was Sir Winston Churchill who once said of a similar kind of speech that it was not a maiden speech but a hussy of a speech.

Nobody can be so naive as to believe what the hon. Gentleman has said about the monopoly of the British Sugar Corporation. Surely, after all these years in the Whips' Office, and in view of the appointment which he has told the House he has undertaken, he knows better. Since 1956 it has been on the statute book that the BSC had a monopoly. In addition, we have known that that was confirmed when Britain entered the EEC on 1st January 1973. It has been reaffirmed by the fact that the Government have given to the BSC a continuing monopoly. There is nothing new or horrific about that.

Mr. Fortescue

The hon. Gentleman must not misunderstand me. I was not talking about Members of this House. This information has surprised many people in my constituency and many people throughout the country. I was not talking about hon. Members.

Dr. Dickson Mabon

My constituents and certainly my sugar workers are under no misunderstanding, and have not been for a long time, about the nature of the British Sugar Corporation. We have had experience of this situation with the beet factory in Cupar. The Minister of State for Agriculture, Fisheries and Food knows about that too. That is a peculiarly painful political point for him to discuss and I shall not press it now.

Many people are aware of this, but it is only when pamphlets such as the Aims of Industry Economic Study No. 1 on Sugar are published that for the various companies' own reasons they go over the history of sugar and begin to argue how they should take part in the present organisation of the industry and what should happen to the British Sugar Corporation. I am in favour of open discussion about this and I only regret that there has been closed discussion so far. I agree that this debate did not start out as a discussion on this particular important matter but rather on the argument about the 1.4 million tons. I am glad that the Minister has accepted our motion on behalf of the Government. Had there been any resistance on his part we should certainly have taken the motion to a Division.

I remind the Minister that he is placing his head right on the political block. He must get agreement on the terms in the near future. Nobody in the industry will talk about reorganisation or anything else unless the 1.4 million tons is written into an absolute guarantee. Until then we are all talking to the wind. Until then we can never be sure of the plans for the future.

My right hon. Friend the Member for Stepney (Mr. Shore) was right to mention the January decision this year on the refining margins. When I first came to the House in 1955 the right hon. Member for Thirsk and Malton (Sir Robin Turton) was Minister of Health. I disagreed with him then and I have continued consistently so to do for 18 years on every major issue, including this one about the EEC. Tonight, however, his speech was admirable. He asked two questions which I hope the Minister for Overseas Development—although they are not directly his departmental responsibility—will reply. I hope that he will not dodge them or pass them back to the Minister of Agriculture because they are the kernel of the debate. If we get the 1.4 million tons it follows that we must get guarantees on the refining margins. I cannot improve on the way in which the right hon. Member for Thirsk and Malton put his questions and I should like a reply to them tonight.

The hon. Member for Cheltenham (Sir D. Dodds-Parker) spoke about the work done by his Committee in the European Parliament. I hope that the refining margins will be stated definitely in his report not in words but in figures. The right hon. Member for Thirsk and Malton asked for an assurance from the Minister that the £5.50 would continue after 30th June 1974. I agree with that or, may I emphasise, with whatever figure is required to produce a fair, competitive, remunerative margin for those who are refining cane sugar. I am anxious that that should be done because it is the burden of the misunderstanding between Tate and Lyle and the Minister of Agriculture.

About 10 days ago we witnessed the sudden outbreak in the newspapers of the expression of concern by Tate and Lyle about the position of its workers—not just at one refinery, but all workers, 6,000 men and women—and the many families represented in that number. My hon. Friend the Member for Liverpool, Scotland (Mr. Marsden) touched on what has been happening in the last 10 days. There has been growing in the industry a tremendous sense of insecurity. Many men and women genuinely believe that their jobs are almost immediately under threat. It is unfortunate that this misunderstanding should have arisen and I should like it to be cleared up as quickly as possible.

It was perhaps inevitable that these discussions with the three companies should have been in private, but I should like them now to be made more in public. I realise that future negotiations cannot be conducted completely in public but I should like to be made public what has happened so far. Cannot the memorandum of 8th August be published? It is a short document containing the heads of agreement on which future discussions will proceed.

The men who work in the industry are just as entitled to know what is likely to be the outcome of the discussion as are the management and the shareholders. I am the last to begrudge shareholders their rights and the first to support the rights of those who have served many long years in the industry. Many workers are men in their late forties and early fifties. For them redundancy is not just redundancy: it is the end of the employment road for many of those working in East London, Liverpool and Greenock.

deal more about these negotiations although nothing has been officially published. An example of the kind of irritation we could well do without was provided by the hon. Member for Mid-Bedfordshire (Mr. Hastings). He interrupted the Minister when he was reading out the Tate & Lyle advertisement and tried to imply that the management had nothing to do with it. It is beyond belief that an advertisement of that character could have been drawn up by the workers' action committee without consultation with the management. It deals with far too complex a matter for it to have been written by an action committee. And what about financial support? This kind of irritation should cease. We should try to get all managements and all workers' committees to work together to reach a solution for the future of the whole industry.

I refer deliberately to "the whole industry". We cannot pretend that we have a cane sugar refining industry completely independent of beet. If beet sugar were suddenly cut off there would be redundancy this winter in some port refineries. If the Minister had not made his announcement about the 150,000 tons of beet that would have been so. It is untrue to say that the cane refining industry either as it is now or as reformed will not be dependent to some extent on beet. That being so, the question arises whether we are to have a mixed beet/cane industry and whether the monopoly of the British Sugar Corporation in beet is to continue, and we may as well discuss this in public. What is the House of Commons for but for discussion of that kind? Why should it be left to managements and Ministers privately to resolve these matters? I ask for the publication of the memorandum of 8th August so that we can see what are the heads of agreement. I understand that the memorandum says that the parties will genuinely see whether one industry for cane and beet can be formed.

That is not a monopoly. A British company operating in a market of 200 million people is not in a monopoly position. It would be so if it were the sole company for the nine countries, but it is clearly not a monopoly in that context. I do not accept that the strictures relevant to a national economy are relevant to an economy as large as that represented by the EEC. Let us dismiss that ideological point and go on to the question whether it is better to have one company or two in the United Kingdom dealing with cane and beet.

A company that dealt overwhelmingly with cane and only partly with beet, as would Tate and Lyle in its new proposals, would have to come to the Government time and again to argue the case for refining margins for cane. If Tate and Lyle acquired some refineries from the British Sugar Corporation it would still be an overwhelmingly cane-based company which would be obliged from time to time to come to the Government on the question of refining margins. I agree that if there were only one company, it would be in a similar position but not so open to the financial vagaries of the market and to the vagaries of the market in Commonwealth sugar. There is no guarantee that those who produce the sugar will necessarily always sell it to us even if we get the 1.4 million tons minimum.

Let us, therefore, have this discussion about whether there should be one company or two for the future. But in the meantime the Government could do a lot of good by discussing this matter with the workers' representatives, with those who made up a committee yesterday—three people from each of the six refineries drawn not just from certain parts of the refinery but from all including the staff, elected by the members, one officer from each national union, one representative of the dockers from Clydeside and Merseyside, the Londoners already having theirs. They should be received by the Minister and a frank discussion should take place on what is proposed for the industry. That would do more to assuage the present difficulties and go a long way to meeting people's genuine concern about their future.

My right hon. and learned Friend the Member for West Ham, South (Sir Elwyn Jones) has suggested to the Minister of Agriculture that he should receive that deputation on 22nd November. I should like him to assent to that tonight, or to agree to meet us shortly after or before that date as is convenient to him. In the Opposition's view, that meeting is vital for those demonstrating here today and last week, so that the workers may know what is happening.

It seems to me, from what I understand of matters as they have gone so far, to be quite possible for a plan to be devised—particularly under the so-called heads of agreement for a one-company solution—whereby redundancy could be dealt with by natural wastage. It would mean arguing vigorously for a longer period for the Australian phase-out. Why should it be three years? Why not five years? Why should we argue about three years when we know we may only get two years? We should ask for five or even seven years. On the different stages of agreement the dates are very close within the next two years and it is possible that the situation could change and therefore the actual phasing-out should be longer.

It is in everyone's interests in the United Kingdom that we look after the welfare of the refining industry as a whole, not separate parts, and take a better organised industry into the Community without any preventable social anguish.

6.57 p.m.

Sir George Sinclair (Dorking)

I am delighted at the evidence we have had in the House today of all-party support for the Minister in the tough task he is facing in Europe.

The strong thrust of the sugar beet industry in this country and elsewhere in Europe is now a basic factor in European farming. We in this country have to come to terms with it, for it is likely to continue. At recent prices, sugar beet has very few economic rivals as a break crop for the areas, especially East Anglia, which grow cereals on a large scale. The recent additional investment of £11 million in the beet sugar refining capacity of this country indicates the expansion of production, though this has been, and still is, controlled to keep a balance between cane and beet sugar.

But elsewhere in Europe things are quite different. The expansion of sugar beet is faster, has been uncontrolled, and has had the full support of each individual Government and of the EEC.

It is against that difficult background that we are today demanding that our Government shall secure agreement in Europe to our continuing to honour our undertaking to developing countries of the Commonwealth to take into our market 1.4 million tons of their cane sugar. We are calling upon the Government to hold to their course in the face of two powerful and legitimate interests—the farming lobbies of this country and of Europe. We realise that, in this, the Minister has a tough task, but he has behind him the all-party support of this House. That is clear from the debate as well as from the motions before the House including Early Day Motion No. 437, which I have sponsored jointly with my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn), who was unfortunately detained by other duties in this House when the debate opened.

I hope that our fellow members of the EEC will accept that the undertaking Her Majesty's Government gave to commonwealth developing countries and to this House over sugar was a basic element in our support for Britain's application to join the EEC. I hope that the Council of Ministers of the EEC will soon confirm the proposal of the commission that Britain's undertaking shall be accepted and that the implication also shall be accepted about the refining margins we shall need to provide for cane sugar refining in this country.

To ensure a market in this county for 1.4 million tons of cane sugar is long as the developing countries need our markets means that we must retain in the United Kingdom a capacity to refine that sugar. Whatever rearrangement of our refining capacity is agreed upon, I hope that it will ensure that the refining of cane sugar is not allowed to become mainly dependent on refineries tied entirely to the interest of the beet sugar industry.

When the Minister is talking to his colleagues in Europe I hope that he will make it clear that this obligation to developing countries is a basic one which we can by no means sidestep by some substitute, for example, by providing development aid or technical assistance. Any sudden change in the market for cane sugar in this country would completely upset the economy and social structure of many small developing countries that are largely dependent on cane sugar, and if we, and if Europe, which is giving some signs of looking outward to the progress and prosperity of the developing countries, genuinely wish to help, we must provide this outlet for their trade. Trade is far better than aid as an economic relationship between developed and developing countries. In addition, Europe should I believe seek to help them with research to discover better ways of making use both of the products and of the waste of their cane sugar industry and of the land which at the moment is taken up with the industry. This research should aim to help them to meet the changing needs of world markets. But that help must be a supplement; for them it can be no substitute for having a market in this country with a decent return for their producers.

7.4 p.m.

Mr. Ian Mikardo (Poplar)

I am grateful to the hon. Member for Dorking (Sir G. Sinclair) for his speech, not only because he said much that was of value but also because he enables me to shorten my own speech by having made one point better than I could have made it myself.

My right hon. Friend the Member for Stepney (Mr. Shore) covered the ground of the problem we are considering so well and comprehensively that there is little one needs to add to it, but I am bound to make an observation on part of the Minister's speech.

In many respects it was one of the best speeches I have ever heard the right hon. Gentleman make, but I also thought it marred by the outburst of indignation—whether spontaneous or synthetic, I have no way of knowing—about an advertisement which appeared in some newspapers yesterday saying that the price of our sugar will go up I do not know how many times over the next few years.

I did not see the advertisement. I had not heard of it until the right hon. Gentleman mentioned it. I do not know what is in it. I have no means of knowing whether the forecast made in it is correct. But one thing I know with absolute certainty is that if there is any body of people who have no right to challenge other people's forecasts in future trends in prices it is the members of Her Majesty's present Government.

In the prophesying of future price movements, right hon. Members on the Government side have carried all the reliability, credibility and authority of the prophet of Baal. They have been wrong over and over again. Any pretensions such as those expressed today by the right hon. Gentleman—unlike the author of that advertisement—to being able to forecast the future trends of prices of sugar or anything else with any degree of accuracy can be blown up, to coin a phrase, "at a stroke".

I did not think that the Minister came best out of that part of the argument. He revealed this in a passage at the end of his speech which he read carefully and in verbatim style—I do not say that critically, because it was right that he should be careful—in which he made clear that although he has some grounds for being confident about maintaining the undertaking given in respect of the intermediate position, for the longer term, beyond 1975, he is doing no more than flying on a wing and a prayer. If hon. Members will examine that passage tomorrow, they will see how careful the right hon. Gentleman was not to say that he had any certainty at all about the situation after 1975.

The pressures which have been put on the Minister up to now will increase in direct proportion to the enormous escalation of beet sugar production on the Continent. My right hon. Friend the Member for Stepney gave the figures of the increase. The hon. Member for Dorking called it an "uncontrolled escalation". The right hon. Member for Thirsk and Malton (Sir Robin Turton), in a most impressive speech, talked of it as being evidence of the way in which we have always been—and look like always being—out-smarted by the French sugar beet lobby. With every extra 100,000 tons of beet produced in France—and a ¼ million and ½ million, and beyond that—the ability of the right hon. Gentleman to carry the banner which he is now striving valiantly to carry will be lessened all the time, although I do not doubt his good intentions.

Unlike the right hon. Gentleman, I do not often make prophecies. I am always conscious of the dictum of George Eliot that prophecy is the most gratuitous form of error. But I have a feeling in my bones that within the next few years we shall have in the European Economic Community a sugar mountain to parallel the butter mountain which we have had up to now, and it will not surprise me if, in a few years' time, we find the top lopped off that mountain, in the way that the top was lopped off the butter mountain, by a sale to the Soviet Union at a price less than half that which our constituents have to pay.

My constituents in Poplar pay their taxes to subsidise the sales of butter—as, I believe, they will subsidise the sale of sugar in a few years' time—so that Soviet housewives may buy it at less than half the price their own wives have to pay. That is good! That is brilliant! One has to have a Government of businessmen to organise something like that. Ordinary common-or-garden people would never be clever enough for that.

I want to make one other point in order to reinforce a remark made by my right hon. Friend the Member for Stepney. I do not think that we should take a defeatist attitude in this matter. I think that the right hon. Gentleman has given up a part of the fight even before it starts. He talks about his 1.4 million tons, which, as we know, can be 85 per cent, of 1.4, which is a little less than 1.2. He is prepared to take it at that and forget all the rest, knowing perfectly well that that involves a large-scale loss of employment in three sensitive areas. It is wrong to be defeatist and take that line, and not try to do something about it.

The right hon. Gentleman was not quite as defeatist as the hon. Member for Liverpool, Garston (Mr. Fortescue), who thought that large-scale redundancy would not be so bad as long as it was in another parish and not his own. He did not mind a mess being made of the operation, as long as the messy stuff was dropped on another doorstep and not his. That was defeatist—but the right hon. Gentleman was defeatist, too.

To reiterate something said by my right hon. Friend, we certainly should have a shot—my hon. Friend the Member for Greenock (Dr. Dickson Mabon) said so, too—at approaching the Australian Government to see whether we could have a longer period than three years in which to phase out the Australian quota. We may not get it. They may not want it. All right, too bad, but we should try. After all, there is a better Government in Australia now than there was at the time when the three-year period was fixed, and we really ought to try. They care a great deal about the plight of underdeveloped countries, and if they saw this as an indirect help to the exports from the other Commonwealth countries—which is what it would be—they might be willing to take a certain view on the matter.

Secondly, we ought to see whether, as that arrangement is phased out—one hopes more slowly—we could get at least a part if not the whole of the quota which is disappearing added to the quota of other Commonwealth producers. Again, it might not work. The right hon. Gentleman said that some of the present Commonwealth producers are having difficulty in fulfilling their present quotas, and I am sure he is right. It may be that they could not cope with the addition, but why do not we try? Why do we adopt this hopeless, defeatist attitude? I was glad to hear the remarks on that subject made by the right hon. Member for Thirsk and Malton and he was right.

I do not want to say too much about the reorganisation of the industry as I do not like discussing a subject when I am in the dark about it, and we are all in the dark, except the right hon. Gentleman. I agree with my hon. Friend the Member for Greenock that a little light should be thrown on the subject. The fact is that the port refineries are factories with good plant and equipment and a stable and efficient labour force which is producing extremely well. It would be a great loss, not only to them but nationally, if that were broken up.

The right hon. Gentleman said it was natural that in the beet processing plants they should add the white ends, and so on, and carry right through. From the point of view of the Beet Sugar Corporation, there is everything to be said for that. Considering the matter only in the tactical terms of a single enterprise, that is right and nobody can query it. But considering it in strategic terms of the industry and the national interest, I wonder whether anybody is doing a cost-benefit analysis on the whole operation, because of what avail is it to install new equipment at considerable expense in the beet plants in order to put out of production very good existing equipment in the port refineries? What avails it to put the beet plants in a situation where they must canvass to get more labour so that they can put out of work people who have been working in the port refineries for a long time?

If an overall cost-benefit analysis were done with, on the one side, the tactical advantages of processing the beet in the beet factories, and, on the other side, the waste of resources through rendering good plant idle, the money paid in redundancy payments to redundant workers, the money then paid year after year in unemployment benefit and, in some cases, supplementary benefit, what would be the result?

Has anybody done what a former Member of this House called "the total sum" on this operation? I do not believe the British Sugar Corporation has done it. I do not believe that Tate and Lyle or the right hon. Gentleman or his Department have done it, and it is about time somebody did it. Otherwise the reorganisation will be carried out on the basis, not of the objective evaluation of criteria in the overall interest—and it is clear from the Minister's comments that this is how the negotiations between the three companies have gone—but of a Petticoat Lane haggle between the three organisations, each trying separately to get the best it can out of the final operation.

I share the view of those who have said that it is a good thing that the House is speaking with one voice today, but that does not mean that I am altogether happy with what the Minister said or with the situation, because I am not. I hope that the Minister will accept the support he has had today, not as something to lull him into complacency, but as an earnest that we want him to use it as a springboard to do much more and much better than he has done so far and appears likely to do from now on.

7.19 p.m.

Mr. John Farr (Harborough)

I, too, am delighted that the House is united behind this motion, originally tabled by the Labour Party. Unlike the hon. Mem- ber for Poplar (Mr. Mikardo), I do not think there is any chance of the Minister or the Government reclining behind the motion and doing very little.

The motion is a masterpiece. It is full of detail and calls upon the Government to take action in various ways. Unanimous acceptance of it by both major parties—there is no representative of the Liberals here now—indicates that the Government intend energetically to pursue what is said in it.

It is important that the motion refers in its opening words to the dependence of developing Commonwealth countries on the sale of their cane sugar to the United Kingdom and on orderly marketing through the Commonwealth Sugar Agreement. I congratulate my right hon. Friend the Minister of Agriculture, Fisheries and Food on his speech, but he seemed to imply that it was merely an obligation accepted by this country that we stand by the Commonwealth sugar producers and ensure that the terms of the agreement concluded a couple of years ago in Brussels would be maintained. He did not pay full recognition to the fact that we in this country are greatly in debt to the Commonwealth Sugar Agreement. For many years it has served British housewives well. It has enabled them to have first-class cane sugar at very competitive prices. It has also given the people in the Commonwealth who produce a chance of earning a decent livelihood.

It has not all been "give" on our side. There were times, for instance, in the Cuba crisis, when the world price of sugar was doubled, yet we still got it from the Commonwealth at the agreed price. Even today, the Commonwealth Sugar Agreement price is substantially below that at which we purchase from the rest of the world. It has been a good bargain for our housewives.

They key to the motion lies in its reference to the need for the EEC to curtail its own production of beet and to join a new International Sugar Agreement as a major net importer ". My hon. Friend the Member for Cheltenham (Sir D. Dodds-Parker) referred to some of our colleagues and friends in the Community and chided some of his hon. and right hon. Friends below the Gangway—as he termed it— for suspecting the purposes of those Community colleagues. What is one to do when faced with statements of the type made by the French Minister for Agriculture which deride the value and purpose of the undertaking expressed in the motion and call upon the French sugar beet grower to expand his production further.

When such uncontradicted statements are made by French Ministers, it is right and natural for hon. Members on both sides to call the Minister's attention to them and to warn him of a possibly dangerous situation developing.

The hon. Member for Poplar did not think that the motion was all that energetic. In fact, it is emphatic in what it says about the need for recognising the importance of continued employment for refinery workers on the Clyde, in London and in Liverpool.

In addition to the tens of thousands in this country who are dependent upon the Commonwealth Sugar Agreement for employment, there are millions in the Commonwealth, on a lower standard of living, dependent upon its effective working. There are no wealthy sugar barons in the Commonwealth countries I have visited. In Mauritius, for example, there are thousands of small farmers in a country bursting at the seams where they can grow no other crop but cane sugar because of climatic conditions and because world markets do not exist for any other crop. In Fiji, the Indians and Fijians who, have 15 or 20 acres of land alloted to a family, can eke out a reasonable standard of life thanks to the Commonwealth Sugar Agreement. Jamaica, with its present 20 per cent, unemployment, has 17 per cent, of its populace dependent upon the Commonwealth cane sugar crop. We must not forget the livelihood of countless thousands of families in the under-developed world as well as that of the men on the Clyde, the Mersey and the Thames.

The motion hits at the heart of the problem. It calls upon the Government to … honour its undertakings to the Commonwealth sugar importers to import 1.4 million tons of cane sugar…". As hon. Members on both sides have made quite clear, it is a valueless undertaking if the financial climate does not exist to make it possible. It is no use my right hon. Friend pointing out that we have this undertaking if, at the same time, it is physically and financially impossible for our port refiners, because of the financial barriers that have been raised, to work profitably within the EEC. I join the hon. Member for Poplar in saying to my right hon. Friend, "This is where you must be firm; it is no use having an undertaking for 1.4 million tons if it is financially impossible to refine and handle it. You also, in our negotiations to join the EEC gained an undertaking to the effect that the 1.4 million tons would come in on fair terms. It is written into the undertaking and you are charged by this House to secure fair terms so that our port refiners have a chance of handling cane sugar on an equitable basis."

We are discussing a motion which concludes that we must …insist upon major accompanying changes in the sugar policies of the EEC. I have to attend agricultural meetings in Europe from time to time and I am depressed by the inward-looking views of many of the deputies and delegates of other countries. They are not concerned with limiting sugar beet production in Europe. They are not the slightest bit interested in doing so. When one refers them, either formally in debate of privately in conversation, to the undertaking to under-developed nations of the Commonwealth, one is told quite frequently that it is not of great importance and nothing must stand in the way of the onward march of the European sugar beet industry. Indeed, when we have tried to secure a debate on the CAP and our sugar industry, we have been told that these matters may be discussed but that there is no question of any major variation being made to them.

I conclude with a point which is not included in the motion, but which has been discussed in the House. What sort of industry do we want for the handling of cane and beet sugar after reorganisation has taken place? As has been pointed out by my hon. Friend the Member for Liverpool, Garston (Mr. Fortescue), there will doubtless be big changes, but I believe that a two-company structure is what we need. It is not for this Government to establish one large sugar monopoly in this country. The sort of solution my right hon. Friend should be searching for is one that will provide us with two large companies, each with a presence, set-up after the reorganisation,

I should like to see that achieved possibly by the British Sugar Corporation selling back to Tate and Lyle some of the sugar beet areas that were formerly Tate and Lyle's and perhaps at the same time creating a cane capacity by taking over Manbre and Garton. An alternative would be for Tate and Lyle to establish its beet interest by taking some of the beet factories of the BSC.

We want a two-company, say a double-presence, set-up after the reorganisation, and I believe it to be best for the customer that there should be some competition. Certainly it would be better for the beet producer in this country if he did not have to supply produce to one monopolistic giant all the time, which has to be done today in the British Sugar Corporation.

Finally, I should like to echo the words of a number of right hon. and hon. Members. We ask that the Australian cane quota be phased out over as long a period as possible. I understand that there is a chance that it may be phased out over two or three years. That period should be as long as possible. I hope that my right hon. Friend the Minister of Agriculture will bend his undoubted energies towards securing that aim, as well as securing recognition in Europe that, if we are to have a viable cane industry in this country, it is essential that we maintain our 1.4 million tons as a minimum for cane sugar imports.

7.31 p.m.

Mr. Alfred Morris (Manchester, Wythenshawe)

All of us agree that this is an important debate. My right hon. Friend the Member for Stepney (Mr. Shore) made an extremely powerful case in support of the motion. In contrast, the Minister, who had a more difficult task, made a much less convincing speech. We have read in the Press with what anguish the Government faced the prospect of this debate. The newspapers explained the Government's decision to accept the motion in terms of discretion being the better part of valour. The Press recognised that, for the Government, a most embarrassing parliamentary defeat was the alternative to accepting it. The simple truth is that the Minister of Agriculture, Fisheries and Food had, so to speak, no bankable assurance that large numbers of his hon. and right hon. Friends would be available in the Lobbies. I honour those who speak their minds and are prepared to put their votes where their sentiments lie. Such people clearly include the right hon. Member for Thirsk and Malton (Sir Robin Turton), the hon. Member for Banbury (Mr. Marten), the hon. Member for Holland with Boston (Mr. Body), and the hon. Member for Harborough (Mr. Farr). Those hon. Members have exerted a very strong influence on Parliament's consideration of every aspect of the problem of Commonwealth sugar.

Unfortunate as it may seem, the question now is not whether the Government accept the motion but whether M. Jacques Chirac, the French Minister of Agriculture, accepts it. There is another important question. If M. Chirac says what we all expect him to say about the purposes of the motion, how will British Ministers deal with his inexorable determination to frustrate those purposes? The right hon. Gentleman did not address himself to either of these questions. He parried, more than answered, the question I put to him in the course of his speech.

At meetings of Foreign Ministers and Agriculture Ministers in July and September, the Council failed to agree on the EEC Commission's proposals. The views of individual member Governments have not been published, but from Press reports it appears that French Ministers supported none of the proposals.

The French Minister, M. Chirac, is said to have described the proposals as "ridiculous" and to have declared that the suggestion to make the Community a net importer of 600,000 tons "… showed total incompetence."

How does the right hon. Gentleman propose to deal with M. Chirac's contempt for his negotiating position? I should like the House to recall a ministerial statement made to us on 17th May 1971 by the right hon. and learned Member for Hexham (Mr. Rippon). He said: When there has been so much discussion about it in the Community, there can be no question of their saying that they did not understand what they were doing, because we underlined it in the most firm way. He went on: … if we do not get safeguards for the interests of the developing countries, then we could exercise a veto. It must be remembered that we are very large consumers of sugar."— [OFFICIAL REPORT, 17th May 1971; Vol. 817, c. 896.] That was a statement from the right hon. and learned Member for Hexham in earlier parliamentary exchanges on the EEC's attitude to Commonwealth sugar.

I ask the right hon. Gentleman who will reply to the debate whether it is still our position that we shall exercise a veto, if necessary, to overcome the opposition of M. Chirac. The British people are entitled to know. The right hon. Gentleman will agree, because he is much respected throughout the Commonwealth, that the poorer developing countries of the Commonwealth also are entitled to know whether the Government will, if necessary, use the veto as envisaged by the right hon. and learned Member for Hexham in May 1971. I am grateful to the hon. Member for Banbury for reminding me of the unequivocal statement made to the House by the right hon. and learned Gentleman on that occasion.

There is, of course, very little of the spirit of internationalism in M. Chirac's attitude. M. Chirac's concern is with French national interests. He is unashamedly concerned with the interests of his own country. Our case, which has been put eloquently from both sides of the House in this debate, is that there are higher goals for internationalists than aiding and abetting rich and strong countries in order further to impoverish and humiliate poorer countries.

We must stop trying to pacify the bully-boy of the Council of Ministers. Bully-boys are not interested in the right hon. and learned Gentleman's polite generalities, nor are they concerned very much with the good will that was expressed by the hon. Member for Cheltenham (Sir D. Dodds-Parker). Instead of cowering before M. Chirac, the right hon. Gentleman must now speak up for the people of Britain and of the Commonwealth as a whole. The right hon. Gentleman, like his right hon. and learned Friend the Chancellor of the Duchy of Lancaster, comes back from every battle proclaiming spectacular victory when everyone knows he has been defeated.

As the House knows, I profoundly regret Australia's exclusion from our market. I have said so in one debate after another in the House. I believe that the vast majority of the British people, given the choice, will infinitely prefer taking cane sugar from Queensland than sugar beet from M. Chirac's friends in France.

At the September meeting of the International Sugar Conference, the Council of Ministers—largely, it is understood on French insistence—refused a negotiating mandate to Community representatives in Geneva, in spite of the EEC's declaration at UNCTAD 3 in Santiago last year that it would play a meaningful part in the negotiations. This has more to do with hypocrisy than with internationalism. It may well now be asked whether the opting out of the world's largest trading bloc and its largest sugar producer may have made an important contribution to the very sad failure of the Geneva Conference.

The main sufferers from the failure of the Conference are likely to be the smaller developing countries, both importers and exporters, and among the exporters those smaller Commonwealth Sugar Agreement countries—such as Mauritius and Fiji—which must supply a substantial proportion of their sugar to the world market in addition to fulfilling their CSA and American quotas.

A particular feature of the economies of a number of these and other developing countries is that their sugar export markets were developed to further the economic interests of the metropolitan powers in days gone by, and their domestic markets for sugar remain small. It would be scandalous if the crucially important market provided for these important developing countries by the CSA were now to be in any way reduced.

It is now being hinted that certain CSA countries might find it very hard to meet their commitment to the enlarged Community because of difficulties in supply, and that therefore the overall quantity of 1.4 million tons might be reduced. The answer to this is twofold. First, in the 22 years of the Agreement no CSA member has failed to meet its contractual commitment, except where some reduction in that commitment has been mutually agreed. Secondly, although there are new industry quotas under the Agreement, the supply commitment is also joint and arrangements exist for the redistribution of shortfalls in the event of some unfortunate occurence making this necessary.

There are many other hon. and right hon. Gentlemen who wish to participate in the debate. Thus I shall now conclude. In doing so, I recall what Dr. Eric Williams said, speaking as Prime Minister of Trinidad and Tobago, when he referred to the "Wars of the Two Sugars". As Lord Campbell of Eskan, who was referred to earlier in the debate, said in his letter to The Times: Beet industries are struggling to get richer. Cane industries, and the peoples dependent upon them, are fighting for survival. I know whose side we should be on in this contest.

The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) saw this question as a test of the EEC's sincerity. I much agree. It is a clear test of sincerity and, clearly, M. Chirac has already failed the test. For our part, it is our bounden duty in this House to keep our word and to be seen to act honourably to those who are dependent on our word in the developing countries of the Commonwealth.

7.43 p.m.

Mr. Michael Shersby (Uxbridge)

As we have seen over the past few hours, this debate has been concerned not only with the interests of the Commonwealth countries but also with the problems facing our own sugar industry right here in Britain. It is a debate about the future of the British cane refineries, and the way in which they will be able to operate when the existing Commonwealth Sugar Agreement comes to an end, and about the future prospects for British beet sugar production in this country. I think that that, also, should be recognised.

There have been one or two hard things said about beet sugar, and I should not like this debate to be continued without saying a word or two about that very efficient operation which is conducted in our country—an operation of which our farmers are very proud, an operation of which we as consumers have a right to be proud, and an operation which we as a country must safeguard in the future.

But in order to get these matters into perspective, it is necessary to understand what it is that the Commonwealth sugar producers need to ensure their future, and how that need should be accommodated in the proposals of the EEC Commission about future sugar policy on imports of sugar from the developing countries, to which my right hon. Friend referred this afternoon.

The Commonwealth needs four basic assurances, and I shall tell the House quite shortly what they are. They are quantity, price, duration and outlet. It is those four points which are covered by the existing Commonwealth Sugar Agreement, and I believe that any new agreement resulting from the Commission's proposals must also cover them. Acceptance of these points implies, first, that there must be a proper mechanism for importing the Commonwealth sugar which we have been talking about this afternoon; and, secondly, there must be a refining industry with the capacity ready and willing to take that sugar.

We have heard today from a number of hon. Members about the concern which has been expressed by the major United Kingdom port refiners, about what will happen when this sugar comes into the Community, and about whether they will be able to refine it on a profitable basis. We have also heard about the concern that is being expressed by the many thousands of refinery workers who have demonstrated outside the House today, and who have attended all three party political conferences.

Why has all this happened? It has happened because we do not yet have a detailed final agreement on the future place of the UK sugar refining industry in the new sugar régime which will come into force on 1st July 1975. It has also happened because the refiners do not know whether the existing Treasury subvention of £5.50 per ton will be continued after 30th June next year until the new sugar régime comes into operation.

However, I listened with great interest to what my right hon. Friend said and I have a deep confidence that, at the end of the day, he will be successful in negotiating some satisfactory transitional arrangements on the question of the subvention. We know that he is a skilful, determined and straightforward negotiator, and that he is well aware of the problems facing the refiners while the uncertainty continues to exist.

Then there is the question—perhaps the vital question—of his being able to negotiate an adequate refining margin for the refiners in the new régime. Because the major outlet for Commonwealth sugar is inextricably tied up with the existence of a viable refining industry, a proper refining margin or price structure is essential for them in the new régime. The reason for this is that there is no satisfactory price structure for cane sugar in the Community at the present time. This situation arises because, as we have heard today, most of its sugar is derived from beet, whereas in this country two-thirds of our sugar comes from cane.

The United Kingdom have said—and none of us has any reason to query it—that they need a margin of at least £17 per ton in order to be able to accept and refine Commonwealth sugar on an economic basis—that is, about £15 per ton for refining costs and £2, or slightly less, in terms of profit. In other words, they need a continuation of the existing margin, if they are to be able to continue refining Commonwealth cane sugar on a profitable basis.

We know from what we have heard today from my right hon. Friend that these two questions, of continuing the subvention and negotiating an adequate margin, are among the most difficult problems which he is facing at the present time. I hope very much that the acceptance by the House of this motion tonight, without a Division, will reinforce him in the discussions which he will be having in Brussels, and that they will lead to the success of the negotiations on those two vital points.

That brings me to the question of a possible reorganisation of the sugar industry, which has been so widely discussed both in the Press and in the House tonight. Because of my interest in sugar, both beet and cane—it is well known and I have declared it before in this House—I do not propose to comment on this aspect of the matter except to say that I believe that reorganisation, or unification as it is sometimes called, alone is not necessarily a substitute for a proper refining margin which surely is essential if Commonwealth sugar is to be sold anywhere in the Community.

We know from what has been said in the House today that these discussions on a unified industry have been in progress for some time—in fact, for nearly two years. The purpose of those discussions has been to consider options which would be equitable from the viewpoint of the sugar companies and in the national interest.

Whether the solution is the establishment of a unified industry or the kind of company structure which has been proposed by the major United Kingdom port refiner is not for me to say. Whatever structure is agreed, it must be the best that is compatible with a highly efficient and thoroughly competitive United Kingdom sugar industry. I am sure that my right hon. Friend will have these thoughts in mind as the matter progresses.

I want now to turn to the question of employment in the sugar refineries in this country. It is perhaps one of the most important questions which we are considering this evening. I talked to the sugar workers in the Lobby this afternoon and I asked them to give me a clear and firm answer on the question of their advertisement in one of the national newspapers this week. I asked them whether that advertisement was inspired by the management of Tate and Lyle or whether it had been prepared and paid for by them. The clear answer that I recieved was that that advertisement had been drafted by the Tate and Lyle Action Committee with the help of some of their friends, and that space had been purchased for that advertisement to appear in a national newspaper. I understand that the funds for that advertisement were the funds of the Tate and Lyle Action Committee, and no one else's. We should bear that in mind in considering that aspect of the debate.

Thinking of employment, we know that in the final analysis imports from the Commonwealth will drop from 1.7 million tons to 1.4 million tons or thereabouts when the Australian quota is finally phased out. I use the words "phased out" advisedly because I join with other hon. Members in expressing the sincere hope that that quota will be phased out gradually over as long a period as possible. However, it is inevitable that there will be a reduction in refining capacity which in turn must mean some redundancies.

The important point to bear in mind is surely that this will involve the disruption of the lives of men and women and that such redundancies must, therefore, be arranged in an orderly and compassionate manner over a period of time taking account of natural wastage wherever possible. Control over the future of their own employees now rests with the refiners. I feel certain that they are as anxious as hon. Members to retain a large measure of control over the future of the employees, many of whom have worked in the sugar refineries all their lives, as have their families before them.

I want to express my support for the Commission's proposals which, if accepted by the Council of Ministers, will, I believe, assure the future of the United Kingdom sugar industry and that of the developing countries of the Commonwealth. There is no doubt in my mind that the Commission regards these problems as urgent. They are problems related to deadlines, and this is well described in the introduction to the EEC Memorandum which says: Because of the deadlines set out beneath the Community must define its future sugar policy as regards its international position vis-à-vis the International Sugar Agreement, its obligations towards developing countries—which are set out inter alia in Protocol No. 22 to the Act of Accession—and its internal arrangements applicable from the 1975–76 marketing year as soon as possible. I end my speech on those words, "as soon as possible". These matters are urgent. Deadlines are ahead of us, and I am sure that my right hon. Friend will have those deadlines in mind in the difficult negotiations which lie ahead of him, in which he will have the support of every Member of this House.

7.55 p.m.

Mr. Robert C. Brown (Newcastle-upon-Tyne, West)

I have no constituency interest in this debate. My interest is first as a humanitarian, believing that it is essential that the peoples of the under-developed world have the right to survive and can only survive if the peoples of the developed world permit them to do so, and, secondly, as a sponsored member of the Municipal and General Workers' Union with 11,000 members' jobs involved in sugar refining and the ancillary processes. Clearly I am speaking personally on their behalf.

I do not want to say much about the commitment, but it is as well to remind the House that the right hon. and learned Gentleman the Secretary of State for the Environment told the House on 17th May 1971 and, later, the Commonwealth sugar producers on 2nd and 3rd June at the Lancaster House Conference, that he had secured what he called a moral and specific commitment for the import of 1.4 million tons of Commonwealth cane sugar. Although that commitment has been accepted by the EEC Commission in an advisory document, the Minister himself has conceded that it has not yet been accepted by the Council of Ministers.

As my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morirs) said, it has been quite strenuously repudiated by the French Minister, Mr. Chirac. The Minister's commitment of 1.4 million tons, to which he referred this afternoon—and I would not impugn his integrity or his honesty—cannot be back-tracked. Any backtracking on this commitment reflects not only on the honour of the Minister who negotiated in Brussels, the Prime Minister and the present Minister of Agriculture, but also on the honour of the Government and, indeed, of the House.

If the commitment means anything, it means that the EEC ought to be thinking of the future of the under-developed countries not for three years but at least for a decade. There is no possibility of any of the under-developed countries which at present rely entirely on cane sugar diversifying their industries in less than a decade. In the autumn of 1971 I visited Barbados and, being concerned about the specific and moral commitment of which we have heard so much, I met the sugar producers there. They have complete and utter faith in the British Government. In fact, there was no question in the minds of the sugar producers of Barbados that their future was assured—and not for three years but for many years ahead.

Regarding the expansion of beet, particularly in relation to those members of my union who are employed in the industry, there have been many rumours that the Government are about to do a shabby deal with the French to get out of their difficulty. It has been suggested in some quarters that a deal can be done by which the 1.4 million tons is allowed into the Commonwealth while, at the same time, sugar beet production in the EEC is rapidly expanded and French farmers can therefore be guaranteed increased profits. This deal would work against the interest of the Commonwealth sugar producers—there can be no doubt about that. There is already over-production of sugar in the EEC and this over-production is increasing. It has already more than taken up the gap which may eventually occur when Queensland cane is phased out. If over-production continues there will be either a build up of a sugar mountain in the EEC or a dumping of the excess on the world market. If the excess were dumped on the world market it would compete with the free market cane sugar from the developing countries and would inevitably damage the trading prospects of those countries.

Many Commonwealth countries, particularly Fiji, depend heavily on their non-European free market sugar trade. The present world shortage of sugar is unlikely to last more than a couple of years. If we make a shabby deal, pledging the EEC to further over-production of sugar beet, we shall kill off completely the sugar industries of Mauritius and Fiji at source by dumping cheap sugar into their traditional markets.

The EEC has been referred to more often than not as a rich man's club, but I do not take that view. I do not want to be proved wrong in the future. I believe that the issue that we are discussing today is the linchpin of the test of morality of the EEC not on one issue alone but on two. The first is the sincerity and the will of the EEC to assist the third world to survive. The second is the will or lack of will of the EEC to give the development areas of the EEC, including the area that I represent, the right to an improved future and a fair deal. Those are the two issues on which the complete morality of the EEC is in question.

Many of the Minister's statements in the past few weeks, and certainly his speech today, suggest that a necessary part of any adjustment to the EEC is the reorganisation of the sugar industry in the United Kingdom. Some sugar workers in my union have detected the suggestion that in the future cane refining should not be regarded as an industry on its own but should become subservient to beet. Some of the main refineries would have to close if that were the case and any cane sugar which could not be refined in a much-reduced cane industry would have to be refined out of season by the refiners. That is a wrong-headed policy. The cane refining industry is efficient and produces low cost sugar in Britain because it has been recognised as an industry entirely distinct from beet.

The cane refineries are located at ports to minimise the transport costs with imported cane. They are organised to operate at a steady pace throughout the year. Their overheads and their pricing arrangements are adjusted to all-season work. They have a stable and continuously employed work force, and this is a state of affairs that we want to ensure in the future. Beet refineries operate entirely differently. They are located in beet growing areas and their operation is directed to a short period of frantic activity after the beet has been harvested.

Importing cane sugar into British ports and then transporting it miles across country to be refined among the beet fields is a very expensive policy, even if enormous juggernaut lorries are used, which I do not believe would please anyone. The efficient and socially responsible way to refine cane sugar is in cane refineries. Even the EEC Commission's proposals recognise this important fact.

The second and technical argument arises from the details of the EEC commission's proposals. My union has done a great deal of work analysing the proposals. Under them a cane refinery can be classified as a port refinery or a beet refinery. The profit and pricing margin arrangements are different in the two cases. This means that a combined refining operation with both beet and cane refineries would have to decide which classification to select. Under the Minister's amalgamation proposals the industry presumably would be classified as beet-based. The financial structure and margin allowed for beet is entirely unsuitable for a cane refiner. Following amalgamation under these rules, all cane refineries would immediately become uneconomic and have to close down. My union fears that the Minister may have overlooked this point.

There is no doubt that the most satisfactory and stable arrangement is to match the commitment to import cane with a commitment to refine the cane in purpose-built refineries. This is the arrangement that the Commonwealth sugar producers would obviously prefer, because they certainly do not want to live perpetually in total dependence on the beet industry, which is their competitor. The commitment to import cane sugar means nothing if the refining industry is killed off.

I hope that nothing I have said recently indicates that I am a front man for Tate and Lyle. Neither my union—the General and Municipal Workers—nor any of its individual members collectively employed by Tate and Lyle, is a front man, or organisation for that company. The interest of my union and its membership is in continuing employment for their brother workers in the third world and not, selfishly, for their own jobs in the United Kingdom.

It has been apparent for many months that jobs in sugar refining were at stake, mainly in our developing areas. Yet we have not heard a peep from Tate and Lyle about the threat to employment in sugar refining.

Mr. Hastings

Perhaps I misheard the hon. Member. I thought he said that he had heard nothing from Tate and Lyle about the dangers to its employees as a result of these measures.

Mr. Brown

The hon. Gentleman seems to be apologising for Tate and Lyle, and seeking to excuse any interest that it might have had in a certain advertisement to which the Minister rightly referred this afternoon. For many months the jobs of members of my union and the jobs of sugar-producing workers in the Commonwealth have been at risk. The pass was sold in 1971. One does not need to be brilliant to realise that these jobs have been at stake for many months. As I was saying, we did not hear a peep out of Tate and Lyle about the threat to employment—I do not think that I am being unfair to Tate and Lyle when I say this—until the threat to the company's continuation as an independent undertaking was posed by the negotiations that the Minister seems to be forcing on the industry. Then, and only then, did we have the reincarnation of Mr. Cube—

Mr. William Clark (Surrey, East)

No, No.

Mr. Brown

Yes.

Mr. Clark

I have no interest in Tate and Lyle, but surely the hon. Gentleman must agree that if and when Tate and Lyle thinks that its business will disappear, it should start negotiating. There is no point in raising fears of what might happen prematurely. As soon as Tate and Lyle realised that the whole of the cane sugar refining industry was at risk, it immediately informed the employees—and that is what it is all about.

Mr. Brown

The hon. Gentleman clearly has not been following what I have been saying. I am trying to spell it out. It was only when the independence of the company was threatened that Mr. Cube was reincarnated and the letter-boxes of hon. Members were bombarded with 2 lb bags of refined sugar from Tate and Lyle—sugar with a picture of Mr. Cube, complete with his sword and shield to prove that he was not a ghost but a reincarnation of the 1949 Mr. Cube.

I felt outraged by this attempt to attract my support. It is often said that every man has his price. I do not concede that, but even if it were true, a 2 lb bag of damned Tate and Lyle sugar is not my price. I see this as a serious insult to hon. Members. However, some good has come from it, because many old-age pensioners have received sweeteners from hon. Members. I certainly would not have shed any tears if Tate and Lyle and the rest had come under public ownership at the time of the last Mr. Cube campaign.

I thought that the Minister treated very lightly the extension of cane imports. If we are sincere in our desire to safeguard the interests of developing countries, we must allow for the extension of their trade in sugar. The 1.4 million tons has to be regarded as a minimum commitment. The phasing-out of the Australian quota of 335,000 tons gives a great opportunity. Several hon. Members have mentioned increasing the phasing-out time. If it were increased from three to ten years, the Commonwealth countries would have the chance to extend their production and take up the slack.

We have had no guarantees about any undertakings that the Minister will get from the Council of Ministers but, even if he delivers the goods and we get the guarantee of 1.4 million tons, what will this mean? He has told us that the 11,000 workers in the industry about whom I am talking can expect at best 85 per cent. to 90 per cent. If we get the best, 90 per cent, of the 1.4 million tons of refining, that means 1.26 million tons. That is a shortfall of 750,000 tons. This must mean considerable redundancy.

Mr. Godber

It is important to get this matter straight. The 85 per cent. to 90 per cent., to which the hon. Gentleman has rightly referred, is an undertaking which the Commission propose to write into the regulation when it is produced in regard to a minimum requirement. It is not a maximum, it is a minimum. If the port refiners are able to attract the full amount here because of the good service that they give to the Commonwealth countries, there is nothing to prevent them getting the full 100 per cent.

Mr. Brown

I am glad to have the Minister's assurance on that. Even then, it still leaves a considerable shortfall and there must be considerable redundancy. One is entitled to ask what steps the Government intend to take to provide alternative employment in Greenock and Liverpool, where there is already heavy unemployment. I hope that we shall get much more than the assurance we have already had and that the Minister will be prepared to stand up to the French "bovver boy". If the French act as they are acting today, as the "bovver boy" of Europe, and win the day on this issue, Europe will become the "bovver boy" of the third world. I am sure that no one in the House would wish that to happen.

8.16 p.m.

Mr. Christopher Brocklebank-Fowler (King's Lynn)

I am grateful to have caught your eye, Mr. Deputy Speaker, because I believe that I am the first speaker in the debate who represents one of the major sugar beet constituencies. Speaking at this late stage in the debate, when so many of the arguments have been deployed with great eloquence, I cannot help being reminded of Pitt the Elder speaking in this place in 1759. A contemporary report recorded him as beginning a speech on sugar in the following manner: He said, 'Sugar, Mr. Speaker',—and then, observing a smile to pervade the audience, he paused looked fiercely around, and with a loud voice, rising in its notes and swelling into vehement anger, he is said to have pronounced again the word 'Sugar!' three times, and having thus quelled the house and extinguished every appearance of levity or laughter, turned round and disdainfully asked, 'Who will laugh at sugar now?'. Certainly this afternoon we have heard the very complex aspects of the total sugar scenario. There is one aspect, however, which has not yet been considered fully in the debate. That is that there is an increasing world consumption of sugar. We often talk about sugar as though the production of sugar is rising and the consumption is static. That is not so in world terms. In the United Kingdom, because of our relatively high standard of living, we have a fairly static level of consumption of sugar now, and nearly two-thirds of that is imported, principally, at present, from the Commonwealth, and a major part of that is the Australian quota. I think that it would be right, in a way, to start with the removal of the Australian quota in considering what ought to be done to reorganise the British sugar industry now.

The removal of the Australian quota and of world free sugars will account for the loss to the port refining industry in this country of about 410,000 tons by 1978. As has been rightly said by hon. Members on both sides of the House representing constituencies in which the port refineries are situated, that may contribute towards unemployment in those areas.

Mr. Heffer

It will.

Mr. Brocklebank-Fowler

The answer is not as was suggested—if I understood him correctly—by the right hon. Member for Stepney (Mr. Shore), when he said that we must cut European sugar production. I hope he will have the courage to come to my part of the country and explain to the agricultural community in East Anglia precisely what he means when he speaks of the future of the sugar beet industry. Does he mean that we should cut the growing of sugar beet in the Community, or that we should cut the growing of sugar beet in Britain?

Mr. Heffer

Will the hon. Gentleman come to Liverpool and tell the cane sugar workers who now work for Tate and Lyle that they will be unemployed? Will he explain that to them? Will he advance that argument to those workers? No one is suggesting anything other than the status quo.

Mr. Brocklebank-Fowler

The hon. Member for Liverpool, Walton (Mr. Heffer), who has not done the House the courtesy of sitting here, as I have, for nearly five hours—

Mr. Heffer

I have been out of the House for one and a half hours.

Mr. Brocklebank-Fowler

—should listen to Members who wish to make a speech before he begins to attack them. It is none of my purpose to cast aspersions on the right of employment of those who work in the sugar industry and in the port refineries. On the contrary, I believe that in the new circumstances we have to reform the sugar industry in Britain from the point of view of the beet producers and to accommodate the loss of the Australian quota. I envisage that there should be within a reformed industry no major change in employment prospects in the port refineries. There may be some change and it may be possible to accommodate that change over a number of years by sensible employment practices.

It is for the hon. Member for Liverpool, Walton to represent his constituents and it is my business to represent mine. I am telling the House that much employment in Norfolk is occasioned by the growth of sugar beet. I was inviting the right hon. Member for Stepney to make clear whether, when he said that there should be a cut in the growth of sugar in Europe, he meant that there should be a cut in the United Kingdom. I was inviting him to tell us whether that was what he said earlier and, if it was, to come to my part of the country and explain to my constituents why that should he so.

Mr. Shore

I accept the hon. Gentleman's invitation. I was insisting that the present import of cane sugar, which now equals 1.7 million tons, should con- tinue. That does not in itself imply any cut in the existing beet sugar. A great expansion of beet sugar, as the hon. Gentleman well knows, has taken place on the continent of Europe as a result of highly protected CAP mechanisms.

Mr. Brocklebank-Fowler

I am grateful to the right hon. Gentleman. It is part of my case that there should be a substantial increase in the production of sugar from beet in Britain, and the fullest accommodation of the 1.4 million tons from the Commonwealth at the same time, without there being conflicting interests.

I hope that when my right hon. Friend continues the negotiations he will seek to replace in its entirety the Australian quota that currently comes into the United Kingdom by an increasing tonnage of cane sugar from the Commonwealth and an increased domestic acreage, to enable beet growing in Britain to contribute as at present to the efficiency of agriculture in a modern system in the eastern part of the country.

Mr. Spearing

Does not the hon. Gentleman agree that there is an inherent difficulty in the balance he suggests because the EEC sugar arrangement has an inbuilt mechanism to produce a surplus and will go on producing a larger and larger surplus? Therefore, the European beet growers will be in competition with East Anglian growers anyway, and they might both have to be subsidised by FEOGA payments.

Mr. Brocklebank-Fowler

I do not believe that the Community has yet reached its final perfect state. I am a supporter of our being in EEC and I simply want my right hon. Friend to fight in the continuing negotiations in the Community for the two aspects of this policy, which I think are in Britain's interest.

First, we should be able to accommodate the 1.4 million tons, and I hope that in the future we shall be allowed, by agreement with the others as part of the relationship between Europe and the developing world, to import more. Secondly, we must ensure that Britain gets her share of the additional sugar beet that is grown in Europe as a result of the lapsing of the Australian quota over a period of three years. If my right hon. Friend goes into battle with vigour, as I am sure he will, changes can be made in the existing situation.

The most important aspect to come out of the debate is the current state of uncertainty of the sugar refining industry in Britain. I was much in agreement with what the hon. Member for Greenock (Dr. Dickson Mabon) said about discussion taking place in public. I suggest to the House that because the consumption of sugar in Britain is of such vital importance to our Commonwealth producers, our domestic beet producers and the consumer, it might be a suitable subject for consideration by a Select Committee. I invite my right hon. Friend to consider whether a Select Committee should take evidence on the present situation of the refining industry in Britain and perhaps make recommendations to the House.

8.28 p.m.

Mr. John Roper (Farnworth)

Unlike many hon. Members who have spoken from the Opposition benches I have no constituency interest in sugar and will therefore speak briefly. I have, however, a continuing interest in the commitment given by the former Chancellor of the Duchy of Lancaster at Lancaster House. To me, it was one of the important parts of the negotiation, believing as I do that membership is in the long-term interests of Britain only if we are prepared to accept our responsibilities to the third world on a continuing basis. I also have a considerable interest as a consumer and on behalf of my constituents who are consumers of sugar and are anxious to see a rational structure for the sugar processing industry.

I am delighted that there is agreement across the House on the motion. The only difference that arises between the two sides is in the degree of optimism about what is possible in the Council of Ministers at the end of next month, when it considers the matter again. The commitment on cane sugar given by the Chancellor of the Duchy to the Commonwealth countries, which has been taken up by the Commission in the consultative document issued in July of this year, is of great importance. The Commission has accepted it and it is up to the Council of Ministers to do the same. Here, we rely upon the activities of the Minister.

The Minister referred to the 350,000 tons of Australian sugar which is to be phased out. It was put to him that this should be replaced by sugar from other Commonwealth countries. He pointed to the difficulty of doing this because of the shortage of supply in some Caribbean countries. I accept that for some of the Caribbean producers it is not possible, but I would have thought that for producers in Mauritius and Fiji there would be considerable possibilities for increasing their exports to this country. Therefore, I hope that the right hon. Gentleman will re-examine that aspect of the matter in order to ensure that a significant part of the 350,000 tons is taken up by producers in less-developed countries who have surplus capacity, which they are selling on the world market at the moment.

The second question we have to consider about the 1.4 million tons of Commonwealth supplies is the price at which it is to be sold on the British market. This is as important for the less-developed countries as is the quantity that they will get. As I understand it, according to the Commission's consultative document what has been offered is, that they will be able to sell at the world price as long as the world price is not higher than the lowest beet price in the Community. I think I am right in that. That, of course, may mean a higher cost to this country; it may mean we shall pay rather more for our sugar. Here my interest in the third world and my interest in the British consumer conflict to some extent, but in any case I think that it is probable that the Commonwealth sugar agreement price would almost certainly have risen when that agreement came to be renegotiated if we had not entered the Market; it would have had to have risen towards the world price. Therefore some of the comparisons we have seen between the present Commonwealth Agreement price negotiated two or three years ago, and the beet sugar prices are somewhat unrealistic. The new CSA price, if there had been one, would have been a higher price. The cane price would be bound to rise even if we left the EEC and were able to negotiate a new Commonwealth sugar agreement.

I come to the question of sugar processing and refining. This raises a whole host of other issues which are sometimes unfortunately confused with the question of the third world, not always to the third world's advantage. I am sorry that the Minister has not found it possible to publish the report of the independent consultants, which I think he received last year and which surveyed the whole of the problem of the industry. British entry into the European Community and the reports of the Public Accounts Committee in recent years have forced us to look again at the structure of the processing industry in this country and brought to light the extraordinary extent to which Tate and Lyle have been feather-bedded by successive Governments. The Public Accounts Committee's evidence of last Session was, unfortunately, heavily sidelined, and so we do not know how much it costs the British taxpayers and consumers to permit Tate and Lyle to go on refining 250,000 tons of beet sugar. Question No. 663, on 7th February 1972, suggests that it may have cost the taxpayers and consumers as much as £1½ million a year for Tate and Lyle to process the 250,000 tons of raw beet sugar, or about £7 a ton more.

Similarly although it has been known for many years that there has been off-season capacity in the British Sugar Corporation's sugar beet factories where raw sugar could be processed at lower cost, according to some of the evidence, than at the port refiners this has not come into the open. We need to know what would be the position in a unified sugar undertaking. We need to have figures. The unifying of the cane and beet industries means even more of the cane sugar could be refined in the sugar beet factories off season. There is certainly a section in the Commission's consultative document which suggests that that might be the case, but to have this information the House would need to know the relative costs between the two processes.

Now we are forced for the first time to consider the industry as a whole on a rational basis. It becomes abundantly clear, as the Minister himself made clear, that the ideal solution would be a single enterprise. I believe that if there is to be a single enterprise monopoly, this is an obvious candidate, as it was seen to be by my party in previous years, for public ownership. I think that my right hon. Friend the Member for Lanark (Mrs. Hart) would find it a useful candidate for her National Enterprise Board. This would be a strong case for public ownership. Mr. Cube can threaten and bribe, but he has had it far too easy for far too long, and I hope that no hon. Member will fall for his more misleading information.

As my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Robert C. Brown) mentioned, there is one problem concerning the unified industry which I hope the right hon. Gentleman will be able to say something about when he replies. The Commission at paragraphs 24 and 25 of its proposals referring to the additional refining margin for cane sugar, says that A repayment would be made to the sugar refining industry so that the white sugar produced could compete on the internal market without affecting the marketing of Community-producer sugar. It goes on Because of the difference between refining costs in 'specialised'"— that is, port— refineries and in 'sideline' refineries,"— that is, sugar beet refineries out of season— the repayment referred to above must vary with the type of undertaking refining the sugar. What is not clear from those paragraphs as drafted is whether "undertaking" refers to one refinery or one factory, or whether, if we had a unified sugar corporation in this country, that would be a single undertaking.

That point, to which my hon. Friend the Member for Newcastle-upon-Tyne, West referred, clearly must be clarified, because if the port refineries were to lose an additional premium margin they would be in a serious situation. One interpretation of the Commission's document would give that meaning.

There are always serious problems in any rationalisation of the sugar industry. This could create problems of employment in either the existing port refineries or in the areas of the sugar beet factories. In the interests of the consumer in this country, it is time that the whole problem is studied on a rational basis. Perhaps the Community should consider whether. as in the case of the coal and steel industry, when there is a need for restructuring an industry, special help could be given to areas where there has to be employment pattern changes.

I have tried to make two points. We must ensure, first, that our imports from the Commonwealth are continued and, if possible, increased to take up the 350,000 tons of Australian sugar which is being phased out, and, secondly, that we are able to create in this country a rationally-structured publicly-owned sugar processing industry which could serve the consumer more effectively.

8.38 p.m.

Mr. Stephen Hastings (Mid-Bedfordshire)

I must first declare an interest. I have been connected with Tate and Lyle for some five years, first as a director of one of its subsidiary companies and latterly as a consultant. Certainly this does not make me an expert on sugar, but it is an identity of interest which is perfectly clear.

I listened with care to the speech of the hon. Member for Farnworth (Mr. Roper). If I may say so with respect, it was an able speech and I enjoyed listening to it. I agreed with many of the things he said, but I thought it was a pity that he spoiled it, from my point of view, with a quite unnecessary attack on one member of the trio in the sugar industry.

It was entirely unjust for the hon. Gentleman to talk about the cane refiners as being "feather-bedded". I shall return to that theme in a moment. Nor do I not suppose that his remarks about public ownership, if there were a unified industry, will have been lost on my right hon. Friend, or indeed on anybody on this side of the House. But if that is the solution, then it seems this industry would immediately become a candidate for their voracious and fatuous Marxist appetite. That is exactly what the hon. Gentleman has just described.

I agree that this has been a good day for the House of Commons. The speeches have been mainly concerned with a problem which all of us realise is deep, real and immediate and concerns numbers of people in this country and in many parts of the world.

There is one impression which the hon. Member for Farnworth gave in his speech and to which I should like to address myself, namely, the question of the subvention to the cane refiners. A false impression of the position has been given in some newspapers. When it comes to efficiency or feather-bedding, I think the other side of the case runs as follows.

What is this subvention. The cost of raw cane sugar plus the refining margin is less than the cost of raw beet sugar by £5.60 per ton in this country and less by £23 a ton in the EEC of the Six. Therefore, in order to bring the price up to the beet white sugar a levy is paid by the refiners to the Exchequer. Because no margin has yet been negotiated in EEC—for reasons made perfectly clear by my right hon. Friend—an even larger levy is now paid to the Exchequer and this is repaid to some decree to the refiners as the so-called margin subvention. So far from this costing the taxpayer or the consumer money, the refiners are contributing substantially to the Exchequer and to the cost of British entry to the EEC.

There is another factor which should be taken into consideration by the House. The exports achieved by the cane refiners, which amount to 300,000 tons of refined sugar a year; the earnings to this country, which are not unimportant, of the terminal market and Britain's role in invisibles as well—banking, insurance, shipping, and the very considerable futures market—are all factors which are at risk within the context of this debate.

As we have been reminded by my right hon. Friend, the subvention finishes at the end of June. There will be a gap then of eight months, which will have to be covered before the margin can come into operation. I understand my right hon. Friend's difficulties. He cannot guarantee the subvention, which is subject to negotiation. But he went as far as to say, I think, that it was inconceivable that he would fail to get an adequate subvention. On the other hand, the way in which the threatened companies have worked together, both work people and management, perhaps on separate courses but with the same general objectives, has been not unimpressive.

Although it is difficult for the Minister to produce any guarantee, it is equally difficult, if not more difficult, for the companies to be able to plan ahead with any certainty beyond next June. How can they buy or sell sugar after the end of June. If redundancies have to be faced—the Minister has made it clear that that is what they must face—then they must be adequately, carefully and humanely phased and arranged and, with the general uncertainty after June, this makes this task extremely difficult.

Indeed, it becomes more difficult as day follows day. I am entitled, I think, to ask my right hon. Friend to give the reason for the delay over these negotiations. Is there likely to be a delay over these negotiations to cover the eight months? Why can they not start next week, for instance, and, if not, then how soon does he anticipate that discussions can begin? The planning considerations for the industry are very grave.

Mr. Godber

My hon. Friend might like me to reply to him at once. I recognise fully the fairness of the point he has made. I tried to explain earlier, but it is a very complicated subject.

The so-called subvention depends upon the prices which are fixed on an annual basis, and have been regularly fixed on an annual basis in regard to raw sugar and white sugar. The subvention is the gap between the Community margin and the requirement for this country. Until the raw sugar and white sugar figures are fixed for that ensuing period, we cannot fix the margin. It has never been the custom to fix it long in advance. I have tried to give the best indication I can but, with the best will in the world, this matter cannot be considered until the early months of next year. That is the inescapable situation.

Mr. Hastings

I comprehend that point, and I am grateful to my right hon. Friend. He accepts that, from the point of view of the future of the company and all those engaged in it, an early degree of certainty on this matter is of the greatest importance.

I think it was agreed between the refiners and my right hon. Friend that £17 a ton was the figure which we should seek to establish as an adequate margin from the beginning of February 1975. I believe—and I should be interested in my right hon. Friend's comments on this—that during negotiations within the EEC a figure of £16 a ton was agreed at a certain point, but that that then lapsed to £11.50. I am not sure what the story is, but it would be interesting to know whether that happened and, if so, why. If it is true that my right hon. Friend's team got as far as £16, it is not too depressing. A figure of £17 is, after all, only £1 more, so perhaps we can hope to reach the figure agreed when the negotiations start again.

That leads me to my final point, which relates to the reorganisation of the industry. Here I confess that I do not understand the Government's position. My right hon. Friend seems to be saying that it would be easier to negotiate an adequate margin in the industry if both beet and cane were unified and the burden in some way shared.

That is a nice, symmetrical hypothesis, but it seems to me to be glaringly a hypothesis. It may seem more convenient to negotiate from a unified basis of that kind, but I confess to the gravest doubts about whether it will strengthen the negotiating position in reality. Apart from considerations of competition and choice, concerning which points have been made during the debate and will not be lost on my right hon. Friend, I believe that it will be far less easy to negotiate an adequate margin with a unified industry, rather than with a dual industry in this country.

The Commission's proposal for a separate cane industry in Europe would fall if that happened and there would be no cane industry in the EEC. Cane raws would inevitably be hawked around to beet refineries in Europe. The status of cane would begin to diminish and might well disappear altogether.

Beet, as we have been reminded, is in gross surplus in Europe. It is quite possible in those circumstances, with no cane industry in Europe, that cane would be represented as that surplus. It would be grossly unfair but it could happen. The margin would thus be more, not less, difficult to establish.

Let us imagine that the worst possible case happens. I do not expect that it will, but nevertheless such a computation must be in the minds of those who earn their living in this industry. If there were no margin for cane here, what would be the position? I understand that in this country the unified industry would make about £13 million a year profit on beet, and would lose about the same figure on cane. There is no magical connection between the two figures, but that is the best sum that can be done.

Here, then, is a company which produces two forms of product, making £13 million a year on one and losing £13 million a year on the other. Is that a company in which anyone in the House today would wish to invest? Do we believe that it is a company which any responsible manager, given a long period of time, could continue to run in such a manner, with one of the products losing and the other gaining an equivalent amount? Surely, there would be immense and mounting pressure to phase out cane in those circumstances.

I am not suggesting that my right hon. Friend will fail to negotiate an adequate margin, but that kind of threat is inherent in a unified industry, and I earnestly hope that he will resist it. My right hon. Friend and his colleagues have a heavy responsibility and a difficult task. This debate has made that crystal clear. I do not envy him his job in the negotiations, but I believe he has the qualities to succeed. A great deal is at stake. A Europe the rules of which involve the collapse of the living of all those who work in the cane sugar industry in this country and across the world is a Europe which has got the rules wrong. I earnestly hope that my right hon. Friend and the Government will change them if that proves to be the case.

8.50 p.m.

Mr. Denzil Davies (Llanelly)

Unlike the hon. Member for Mid-Bedfordshire (Mr. Hastings), I have no interest, either financial or constituency, in the subject matter of this debate, but I share the interest of most hon. Members in people living in the less-developed parts of the world and also in citizens of this country employed in the cane-producing and refining industry.

A few years ago, this debate would not have been necessary. There would have been no dispute between the Labour and Conservative parties. The Government could and would have fulfilled their obligations to those millions of poor people who are so dependent upon the production of cane sugar for their very existence. At the same time, the Gov- ernment could have safeguarded the jobs of thousands of our fellow citizens engaged in the sugar refining industry. As a country, we would have been in the happy, and all too rare, position of being able to help our own people and at the same time directly benefiting those living in the poorer parts of the world.

Unfortunately, as a result of the humiliating treaty that we signed in Brussels, we are no longer in that position; we are no longer master in our own house. We cannot do rightful justice to both these groups in the future. Instead of preserving, in those negotiations, our power as a sovereign nation to import as much sugar as we want from these poorer countries, the Government ignominiously signed away our rights by agreeing to Protocol 17 of the Treaty of Accession.

The very language of the Protocol is humiliating to this country. It commences by saying, "The United Kingdom is authorised"—a sovereign nation is authorised to import certain quantities of sugar from Commonwealth countries until 1975. Only until 1975 are we allowed in this respect to behave like an independent nation. After that, nobody can give any guarantees; no Minister can give the House a promise in good faith because he has no power to fulfil such a promise or undertaking.

There was no need to create these difficulties for ourselves. There was no need to create the uncertainties which now lie upon the cane producers of the world and the sugar refiners in this country. If we had entered the negotiations as equals instead of suppliants, it should have been possible to secure a proper derogation from the Treaty of Rome to enable us to fulfil our obligations in this important area.

If the Government have bankable assurances and can give undertakings, then surely, those undertakings could have been written into the Treaty of Accession and this debate would not have been necessary. But in the headlong pursuit of the European "Holy Grail", the poor sugar workers of the Caribbean were merely embarrassing appendages in the negotiations.

After the Government have shown so little resolution in negotiating the terms of entry in this regard, one might have hoped that their crusading zeal for Europeanism would have waned slightly when they came to discuss and negotiate the refining margin that would be allowed to the refiners. It is a complicated matter, but the Government gave in again. Instead of pressing for the figure of £17 a ton, they accepted a figure that was much less. For the second time in the negotiations, the Government gave in and refused to stand up for British and Commonwealth interests.

The question of the margin is very important, because the European beet sugar lobby knows very well that if it can make cane refining uneconomic, if it can disrupt the cane refining industry in this country, it will be able to reduce the amount of sugar we are able to take from Commonwealth countries. The Government must know this. The Minister of Agriculture knows it. But today it appears that placating and kow-towing to the French seems to be one of the major principles of British foreign policy.

Now, the Common Market lobby in this country and the Government are attempting to conceal the inadequacy of their negotiating so far, to conceal their failures and weaknesses, by blaming it all upon the rapacious and greedy French beet sugar farmers. They are the ones who will cause all the problems—those rapacious farmers who have the audacity to stand up for their own interests, and that villain of the piece the French Minister of Agriculture who, it seems to me, is only doing what he is paid to do by the people whom he represents in his own country. They will be the scapegoats now. If we fail to secure the right terms, it will be the fault of the French and of the Continental farmers.

We should make clear in this debate that if, in consequence of the poor terms which the Government have negotiated so far, there are redundancies among British sugar refining workers, and the Commonwealth sugar industry suffers, the responsibility will not lie with the French. The responsibility will not lie with Continental farmers. The responsibility will lie with the British Government, and those who have consistently supported the terms negotiated by the British Government through the Lobbies of this House. Having blessed these terms with their votes, those hon. Members cannot now come to the House and call for sympathy and weep crocodile tears over the consequences of their own action.

For the future, we can only hope that the Government will be more resolute. We accept the good faith of the Minister. We accept that he is an honest, straight-forward negotiator. We accept all that entirely. But unless the Government are prepared as a matter of policy to abjure their past policy of appeasement, it seems to me that we shall fail again.

There is little ground for optimism, because we now have nine Ministers in the Council of Ministers, and our Minister is only one. He cannot even use the veto. Even if the Prime Minister allowed him to use the veto, he could not do so. What is the point of vetoing the proposals? He wants to accept, and he wants the other Ministers to accept the proposals of the Commission. Therefore, the veto is no use to us in these circumstances even if we had the courage—which I do not believe we should have—to use it.

The best we can hope for, once again, is a shabby compromise, which, no doubt, will be dressed up at the Dispatch Box as a major diplomatic victory. Until we have a Government who are not in hock to the French, which this Government appear to be at the moment, those who produce cane sugar and those who refine it can have little confidence in the future of their industry.

8.59 p.m.

Mr. James Scott-Hopkins (Derbyshire, West)

I am sorry that the hon. Member for Llanelly (Mr. Denzil Davies) made such an intemperate speech right at the end of this debate. It is not very helpful to the refiners or the farmers of sugar beet in this country, or to my right hon. Friend in his negotiations in the coming weeks and months. Nevertheless, it is the hon. Member's prerogative to try to re-open the Second Reading debate on entry into Europe if he so wishes. I do not think that it has helped anyone.

The debate has shown the complexities and problems which face not only my right hon. Friend in his negotiations in Brussels but the industry here and in Europe. It has centred on three main questions—first, whether we can agree that the 1.4 million long tons coming in from the Commonwealth as cane sugar will continue to be imported, and whether my right hon. Friend will continue to secure the 1.4 million tons coming into this country in accordance with the undertaking given in the negotiations originally, which has been repeated.

The hon. Member for Llanelly was depressing about this. He did not think my right hon. Friend the Minister of Agriculture, Fisheries and Food could do that. He thought that he was rather a bad negotiator. I disagree. He is an extremely good negotiator.

Mr. Denzil Davies

I did not say that the right hon. Gentleman was a bad negotiator. I said that he was a very good negotiator, but that the Government's performance up till now does not inspire confidence in the future, and the right hon. Gentleman is in a very difficult and weak position—which the Government have put him in.

Mr. Scott-Hopkins

That is where I disagree with the hon. Gentleman. The results of my right hon. Friend's negotiations on agricultural matters with the Council of Ministers in Brussels have, in many cases, been extremely successful and we in this country have achieved great advantages which would not have been obtained if he had not managed to conduct the negotiations in that way. I have absolutely no doubt that the undertaking which was given to us by the Community before we entered, and which has since been repeated, will be adhered to by the Council of Ministers when they discuss this matter and come to a final decision in November or December. So that, although other aspects have to be looked at, our imports of cane sugar will be assured.

There have been suggestions from all sides of the House that the 330,000 tons of cane sugar coming from Australia should be redistributed, with a large part going to the other Commonwealth producers and the remainder of it coming to the farmers of this country. I think my right hon. Friend has made it quite clear to the House, that it is not easy to get an extra allocation of cane sugar from the developing countries of the Commonwealth, and this House should not try to encumber him with this obligation in his negotiations with the Council of Ministers. The key point here is that if we can ensure that the 1.4 million tons comes into this country, that will be a very adequate guarantee to the producers in those developing countries.

The second question has centred around the beet producers, not only in this country but in Europe. There seems to be a complete lack of understanding of the position of my right hon. Friend when he goes to the Council of Ministers, and of the position of others of us who also go to meetings of the Community. It is not true to say that the Community is in surplus in beet sugar production. At the moment it is in balance, and roughly 9.8 million tons is consumed—the figure varying from 8.9 million tons to 10.1 million tons between the years 1968–69 and 1971–72—and 9.8 million tons of beet sugar produced. What the Commission has suggested is that there should be a restriction on the production of beet sugar in the Community. My right hon. Friend made the valid point, which I am quite certain he intends to stick to, that in this country we have always restricted sugar beet farmers from expanding their acreage, so we cannot be asked to restrict further in the years ahead.

The European farmers have not up to now restricted their production to the same extent as we have. They have a different system of quotas—quota A, quota B and quota C. In the proposals—and I am surprised my right hon. Friend did not support them more than he did in his speech—from the Commission to the Council of Ministers there is a very severe restriction on European sugar beet production. This is going to take some swallowing from the French and other European sugar beet producers. They are not being asked to hold their level of production; they are being asked to restrict it. The proposal is that sugar beet production should be encouraged in those countries and areas where conditions are right, and discouraged in countries like Italy where climatic and soil conditions are not right.

There is a decided policy of restriction and reduction in production of sugar beet in the Community. My right hon. Friend is right in saying that we should not come into that category. For years we have restricted our production to allow the import of sugar cane from the Commonwealth. We should support those proposals. If we in this House are all moving in the same direction, it will help a great deal in the Council of Ministers and it will also help the Commission in getting their proposals through.

The third and last question concerns the necessity to have an adequate refining margin. My right hon. Friend said today that need for an adequate refining margin has been accepted in principle by the Commission and, indeed, by most members of the Community. There is at the moment only one stumbling block, but in principle it has been accepted that there must be a reasonable refining margin, particularly for port refiners, to allow them to exist. There is no point in allowing 1.4 million tons of cane sugar to come into the country if it is impossible to refine it. I am sure that my right hon. Friend will be able to secure an adequate margin so that the port refiners will be able to continue their operations not only for the eight months from June 1974 to February 1975 but thereafter.

I join with my hon. Friends in hoping that the negotiations which must take place between the British Sugar Corporation, Tate and Lyle and others, will be as open as commercially possible and will be concluded as speedily as possible. I do not look forward to one monolithic sugar refiner in this country. I hope there will be competition. I hope there will be two companies and that they will be concerned with both cane and beet sugar refining.

I hope that as a result of this debate the Commission will feel that it has the support of this House in putting forward its proposals with a view to getting an equitable solution to this difficult problem.

9.10 p.m.

Mrs. Judith Hart (Lanark)

This has been an extremely interesting debate with some constructive speeches from both sides of the House. Some of the issues involved are complex and detailed. We often find in this Chamber that matters which are essentially questions of principle are translated into complicated and minute particulars.

My first task is to take from the strands and facets of the debate the issues which are accepted by the Government and the Opposition as being of major concern. There are four such issues and they are inter-linked. One cannot separate these issues and say that each is an entity on its own. First, there is the concern expressed by many hon. Members, in moving terms, for the developing coun- tries which rely for their livelihood and future on producing and selling cane sugar. Secondly, there is the concern for our own sugar industry in Britain, and its workers, who depend for their living on the processing and refining of cane sugar from the developing countries. We are concerned for the 10,000 jobs, on Merseyside, in Scotland and in London, which are involved in this industry. Thirdly, there is anxiety that there should be a total guarantee of the access of 1.4 million tons of Commonwealth sugar into the countries of the EEC Fourthly—and this point has not been brought out fully—there is concern that there should be negotiated international arrangements to ensure that the sugar goes in the right way and at the right price and is not re-exported, and that the price of sugar in the free market is not artificially depressed by any action of the EEC. Low prices in the free market for sugar can cancel the benefits of whatever guaranteed markets have been arranged for the rest of the sugar. One cannot divorce a free market from a controlled market, nor quantity from price. Both are inter-related.

I cannot regard the speech of the right hon. Gentleman the Minister for Agriculture, Fisheries and Food as going even half way to meeting our anxieties. The Government accepted our motion but to many of us it seemed that the Minister's qualifications were too numerous and ran too deep. It is clear that the Opposition motion was accepted on rather cool calculations of what might happen to a vote in this House if it were not accepted. However the motion has been accepted.

Those of us who served on the Select Committee for Overseas Development and had occasion to question the Deputy Secretary of the Ministry of Agriculture, Fisheries and Food have grave doubts about whether the Ministry is staffed to meet some of the concerns that we have on behalf of the developing countries. We established in questioning the evidence to the Select Committee that the Ministry has no one of principal level or above who is concerned primarily with putting forward the needs of the developing countries within the discussions and briefings held in the Ministry in relation to the Common Market. We did not feel that that was at all good and we had some strong words to say, in appropriate par- liamentary language, in the Select Committee's Report. We have the impression from the Minister and from other right hon. and hon. Members opposite, with the exception of the Minister for Overseas Development, that they are not sufficiently geared to the nature of the problems of developing countries.

After all, what is it that we are discussing? Let me take four brief examples. I take Mauritius, with a 90 per cent. dependence on cane sugar for its export earnings. I take Fiji. The Minister told us that over the weekend he had met the Prime Minister of Fiji. Fiji has a third of its work force dependent on cane sugar. I take British Honduras and Swaziland. The largest employer and the largest export is cane sugar. Then I take India, which we tend to forget about in this context. India has 250,000 work people dependent on cane sugar. Then I take Guyana, Trinidad and Jamaica where sugar again is the largest employer. We must understand that it is not just the harvesting of sugar but some of the developing industrial complexes growing up round the harvesting of sugar which are threatened.

It has been argued, although no one has given much emphasis to it in today's debate, that what the cane sugar monocultures need to do is to diversify and to build up other industries so that they are not so dependent. But everyone in this House recognises that many of them are desperate to diversify but can do so only on top of sugar and not out of sugar. Only with sugar can they get the export earnings that they need for the investment to diversify.

We have to remember that the workers in cane sugar in the small pathetically dependent developing countries are amongst the 70 per cent. of the world's poor who are trying to scrape a living from the land. If the land fails, we see situations like the famine in West Africa and like the present devastating famine in Ethiopa from which we are only just learning about.

Let us look at the issues created. We come now to what British policies should be. We have to match what the right hon. Gentleman has said against what these policies should be. Let me give the right hon. Gentleman one text for what he should be ensuring in Brussels: … sugar is a major commodity in the common agricultural policy … The real significance of both Protocol 22 and Lancaster House is that the enlargement of the Community must bring about a change in this policy —that is to say, the common agricultural policy. It is not sufficient that association treaties should simply guarantee access for quantities of sugar. They must also provide that the full quota must be bought and imported into the Community … If this is not done the sugar could be bought raw from the country of origin and dumped on the world market in competition with that county's free market sales. The source of the text is the Conservative Commonwealth and Overseas Council. I am certain that the right hon. Gentleman is familiar with it. The second one, briefly and beautifully succinct, is: Britain should oppose proposals which would make the Community a net exporter of sugar. Such a position could only be achieved at the expense of the developing nations … Britain should in general support the growth of cane sugar production and oppose unlimited expansion of beet sugar production by the rich nations of Europe. a beautiful text, and ideally suited to the right hon. Gentleman. It is from Aims of Industry. We have, too, the Select Committee on Overseas Development. I do not know how that rates compared with the Aims of Industry and the Conservative Overseas Council in terms of advice, but it has many strong things to say.

Let us look at the proposals for a change in the common agricultural policy, a problem in which one recognises that the Minister in his negotiations is, on the one hand, negotiating about 1.4 million tons of cane sugar and, on the other, negotiating within the context of the CAP for some desirable change in the level of beet production in Europe. The problem is that he has to mesh these two together and come out with the right answer. But he will not get the right answer on either of them unless he gets it on both.

We know well—and hon. Members have reminded us in the House tonight, as did the Minister—that there has been in the past a strict limitation on homegrown sugar beet to make room for Commonwealth sugar. We take that as our base. What, of course, the European Commission proposed in its April memorandum did not go very far in its suggestions for limitation of sugar beet production in Europe.

The facts show that world consumption of sugar, both beet and cane, has been increasing at the rate of nearly 200,000 tons a year. It has been increasing by 3 per cent. within the Six—not the Nine. But the acreage put to beet within Europe has made it possible for that production not only to meet the increase in sugar consumption in Europe but to go beyond it and from time to time to put the Community in the position of a net exporter.

This is at the heart of the matter. We have to understand the equation—with world consumption of sugar increasing, with EEC consumption increasing by 3 per cent. a year, if that increase were to be met by cane sugar or if a higher proportion of EEC consumption were to be met by cane sugar, if we took the 1.4 million tons as a base from which to move up and not down, the developing countries would be happy and there would be no question of the Minister saying, as he said today, shocking many of us, that he was now assuming a contraction in the sugar refining industry in Britain.

It does not make sense and the Minister must insist with his colleagues—in the same way as in the past the French have insisted often enough with their colleagues in Europe—that sensible things are done. There is no need for any reduction in the cane refining capacity in Britain, provided that beet sugar production in Europe is not permitted to meet increased consumption within Europe. So we cannot accept it when the Minister tells us that almost his starting point is that there will have to be some reduction.

Instead, it seems to me—I fear that this is what he has in his mind, not as what he wants but as what he is likely to get in the negotiation—that he is thinking of success in getting agreement on the 1.4 milion tons, so that he can say, "It is all right. I have fulfilled the Lancaster House declaration and the commitments," but without any guarantee—he carefully did not mention any of this in his speech—that out of that 1.4 million tons, there will not be a considerable re-export from Europe, pushing down the market price, with European-produced beet sugar meeting the European needs and with the inevitable contraction in our refining industry.

If that is what is in the right hon. Gentleman's mind as what he may have to accept, then it is clear from what has been said on both sides today that that would not be enough for us. The message is that he must fight very hard on this and that we must win.

Mr. Godber

I would not wish any wrong impression to go out from the House. That is certainly not my intention. I look to see most of the 1.4 million tons coming into this country. Without any doubt, it will fulfil the useful position that it has had in the past. The question of surpluses in the Community as a whole is something that we shall have to hammer out in relation to the position. But I make it clear that my intention is not what the right hon. Lady thought that it might be.

Mrs. Hart

Let me make myself clear. I do not for one moment think that that is the right hon. Gentleman's intention. However, it may be his fear of what the outcome could be. What the right hon. Gentleman must understand—from what he has just said he seems not to comprehend this—is that there is incompatibility between 1.4 million tons coming in and being sold within the market and a continued expansion in beet sugar production in Europe. The two are not compatible. That is my starting point. One has to see these links. In order to win on one the right hon. Gentleman must win on both.

I am sure that his intention is to do this, but one noticed some of the omissions from his speech today and that, perhaps, there is this doubt in his mind whether he can fully succeed in this dual objective. What the House is saying today is that the right hon. Gentleman has not succeeded and must fight to the point where success is total and guaranteed.

I turn to another point which has not been mentioned today but which will clearly figure largely in the discussions of the Commission's memorandum in the Council of Ministers. That is the proposal for compensatory finance. Again, the Select Committee had things to say about that, but I shall merely outline that we know that the Commission proposed, in its April memorandum, that developing countries which export primary products to the Community should not suffer reduced earnings on those exports either because of a fall in world prices or because of smaller exports to the Community. Seven products have been identified, of which sugar is one.

The memorandum indicated that the Community production of beet sugar would not really be curtailed and that the Community would take part in a new International Sugar Agreement ultimately as a net importer but only in conditions in which world sugar prices remain reasonably stable. If they rose the Community would be free to regard itself as a net exporter. Broadly, that is what the memorandum said.

The memorandum also said that the Community should guarantee by means of non-refundable loans the stability of earnings for sugar by the developing countries and that the loans should equal the difference between a reference level and the actual level of earnings. I shall not go into the complications of the reference level.

Even that has not been accepted and presumably it is still very much under discussion. But the proposal for compensatory finance does not meet the needs of the developing countries, either in respect of sugar or in respect of the other commodities which have been identified, because money does not mean jobs. The only thing that means employment is being able to sell what one can produce. It is guaranteed access to the market alone that can make certain that the developing countries do not suffer.

The Minister said—he argued this very strongly—that the fact that the Commission had no part to play in the discussions in Geneva on the International Sugar Agreement, and the fact that Britain as a result of membership of the Community had no part to play directly in those discussions, did not make any difference and that the talks would have broken down anyway. We cannot accept that, either. I think it was the right hon. Member for Thirsk and Malton (Sir Robin Turton) who said that we had always been able to play a very strong role in helping these negotiations to succeed. Had we been there, or had we been able to persuade the Community to be there, it would have made a difference.

As it is, the developing countries which produce sugar are now in an absolutely critical state. They have not got an international sugar agreement. They have not yet got a guarantee of 1.4 million tons into the Community. They do not know what will happen to the beet surplus in Europe.

All that is left for any of the sugar-producing countries is the link between Cuba and the Soviet Union, for their sugar, and the link between the United States and certain other countries for theirs. Without either the understanding that they need within the Community and without the International Sugar Agreement, it is now crisis for them. It may not yet be crisis for the Community or for Britain, but it is crisis for them. It is just as much a crisis for them as that which is facing workers in the sugar refining industry in Britain if these matters are not resolved satisfactorily during the next few months.

We must not under-rate the real seriousness of that. We can get a glimpse of the state of confusion and irresolution which is prevailing inside the Council of Ministers and a flavour of the problems which the Minister has met in his negotiations when we consider the Commission's position and the "declaration" that the Commission observers were to have issued had the International Sugar Agreement talks succeeded instead of breaking down. The Agence Europe Daily Bulletin of 15th October says: as is generally known, the imminent signing of the new Agreement —this is when it was thought that the talks were going to succeed— has led the permanent representative of the Nine to hastily draw up —that is not my split infinitive— a declaration which was to be made by their spokesman … The declaration reads: The Community having as yet been unable to bring to fruition its work on the future sugar policy and not having been represented at the negotiations on the Agreement, has reversed its standpoint in its entirety with respect to this Agreement. Could there be a greater indication of the total lack of policy within the Community and within the Council of Ministers? That brings home to us the real problems which have faced the Minister. We have every sympathy with the Minister for the problems with which he is contending in these negotiations.

The Minister must ensure that the 1.4 million tons is brought and used within Europe. He must ensure that there is no re-export of cane sugar from the Commonwealth to depress world prices. The Minister must work and must succeed in getting a limitation imposed on beet sugar production in Europe. I suggest to him that it would be wise to stabilise production in Britain rather than to increase it. There should be no need for cut-back of beet sugar production in Britain.

There are different views whether European beet sugar merely needs to be held at its present level or reduced. I think it is likely, if we want to meet the needs of the developing countries, that it must be reduced. The Minister must not at this stage make the assumption which he has been making too easily that the future of the British cane refining industry is in danger. We must leave it to him to fight for a little longer before we talk about redundancies and before we are prepared to look at their social consequences. We rely on him to fight to defend any contraction of the British refining industry.

We must ask the Minister to work as hard as he can to ensure that along with the completion of the policy making of Commonwealth sugar there is a constructive approach to the international sugar agreement and the reconvening of talks at the earliest possible moment.

The Select Committee on Overseas Development decided to concentrate its attention, as the hon. Member for King's Lynn (Mr. Brocklebank-Fowler) and I know very well because we both served on the Committee, upon the effects on the developing countries of British entry is to the EEC. The Committee's report was published at the beginning of September. Referring to a stabilisation scheme, the report says: But such a scheme … would be no substitute for enlarged market access and would be a mere palliative for the denial of such access. The report continues: The intent of the Community about the priorities and needs of the developing countries is inevitably called into question. It is, above all, on providing greater access to markets for the Third World, even where this conflicts with those tenets of the CAP and the CET which have until now been at the heart of Community policy, that the outcome of present negotiations will be judged. The Chancellor of the Duchy of Lancaster, the Minister of Agriculture, Fisheries and Food and the Minister for Overseas Development are well aware that we are not merely talking about the test of British success in the negotiations but the test of what the European Community is all about in its relations with the world outside.

9.35 p.m.

The Minister for Overseas Development (Mr. Richard Wood)

The opening speech of my right hon. Friend the Minister of Agriculture and the whole of our subsequent debate have concentrated on two main aspects of this complicated matter. The first is the future of the Commonwealth producers to whom we not only have important obligations but have given solemn undertakings which my right hon. Friend made perfectly clear we are determined to fulfil. The second, which has occupied a great deal of our debate, is the future of the sugar refining industry in Britain.

I will deal first with our undertakings to the developing countries of the Commonwealth whose economies are heavily dependent on the production of sugar and which I will discuss in the broader context of their proper relationship both with Britain and the European Community. I will then speak on the problems as well as, I believe, the opportunities which face our refining industry at home immediately and in the years to come.

This is neither the place nor the time to rehearse the arguments, which convinced me in the 1960s and remain to me as convincing today, why Britain should join the European Community. That is not what the debate is about, but I believe it is relevant to the motion that I should discuss the relationship between the European Community, which we have now joined, and the developing countries.

I continue to believe that the European Community, especially after its enlargement, is a group of nations with immense potential, economic, political and in other ways, and that its potential is greater still in its latent power to bring greater unity to the world. No one will deny that unity is now more than ever the world's greatest need. I am convinced that it cannot realise that potential unless and until—as the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) said—it is prepared to look outwards and build constructively on its hitherto divided connections with different parts of the developing world. For instance, in Africa past rivalries have divided a continent which now longs for, and seems to be working effectively for, a greater unity.

The negotiations to which my right hon. Friend the Chancellor of the Duchy has referred which have now been opened in Brussels for a new association between a large number of nations in Africa, the Caribbean and in the Indian and Pacific Oceans give me grounds for hope, however long may be the road to a successful conclusion. In the meetings which I have attended I have been struck by the view expressed today by my hon. Friend the Member for Cheltenham (Sir D. Dodds-Parker) that trade rather than aid is the wish of the developing countries. My hon. Friend the Member for Dorking (Sir G. Sinclair) emphasised the same conviction when he said that the outlet for trade is by far the best outlet for the developing countries.

Sugar—and in particular the arrangements to replace the Commonwealth Sugar Agreement when it expires at the end of next year—has always seemed to me to be a measuring rod of the sincerity of our concern for the interests of the developing world—not that it touches the interests of some developing countries at all and it affects only marginally the interests of several others which will play in future an increasingly important part in the history of the world. None the less, it remained—and still remains—one of the surest present tests of the will of an important group of the richer nations to work for the greater prosperity of the developing world and, by doing so, to achieve as well their own greater prosperity. If we had not been willing to give and not resolved to honour undertakings to a number of nations whose economies depend predominantly on the growth and sale of this single product I believe that we should have been guilty of a lack of interest in and concern for the problems and aspirations of the whole developing world, because the problems of the sugar-producing countries are themselves a measure of the problems of all the developing countries. None of them is rich and some of them are desperately poor. They depend to an alarming extent on the sale of their primary produce and many of the sugar-producing countries depend virtually on the sale of that one product, as the right hon. Lady has reminded us. Their employment prospects are not encouraging and even if population increases could be immediately and miraculously arrested, the problem of job creation in those countries would still be appallingly difficult. Again, in the sugar-producing countries the bulk of the employment prospects for doing this lie in one industry alone.

The right hon. Lady spoke about the possibilities of diversification. They, I agree entirely with her, offer little immediate hope. None of those countries is like ours at the beginning of the nineteenth century—on the verge of an industrial revolution. Agriculture is long going to remain the basis of their economies, and even within agriculture the scope for immediate diversification is small. Many of us have seen, in our visits both to countries mainly dependent on sugar and to many others, hopeful prospects of eventual escape to a more widely spread economy, but in all of them it will still be a slow process. Meanwhile their needs must be met. It may be possible to diminish their relative but not their absolute dependence on sugar.

If one looks, for instance, at the dependence on sugar of the four countries most heavily involved one sees that sugar exports from St. Kitts, in the Caribbean, are 93 per cent. of the total exports; in Mauritius over 90 per cent.; in Barbados and Fiji, over half of their exports. Mauritius has two-fifths of her whole employment in sugar. Barbados over one-third. Of these four, Mauritius and Fiji are fairly low-cost producers and they sell much of their output on the world market, but the others produce at a higher cost and largely depend on their bilateral arrangements under the CSA.

A solution which has been often proposed, perhaps chiefly by those with rather little knowledge of the climatic and agricultural conditions of the countries concerned, is that they should diversify quickly into other crops. The suggestion has usually been couched in general terms. There have been few constructive ideas about the type of crop which would be economically viable and would offer as much employment as sugar. In the longer run the growth of the economies of all these countries is bound to lessen relatively their dependence on sugar, but to suggest that it can be immediately and rapidly replaced is to under-estimate the time needed to carry out a major reorientation of those economies, and to propose that industry should replace sugar as the source of employment is also to underestimate the massive investment that would be required.

Production of CSA quotas creates about 150,000 jobs. If one estimates the capital cost of creating a new job in industry at around £2,000 it would perhaps require an investment of £300 million, a sum nearly the size of the whole aid programme, to provide alternative employment. This is the measure of what I regard as an alternative unacceptable either to the developing countries, if only because this vast reorganisation would take years, or, for a number of other reasons, to the Government.

In the light of all this, not only do I believe it was right for us to give those countries the undertakings we did; I am convinced that we had no alternative. After what my right hon. Friend and I have already said, I hope that there is no need for me to re-emphasise the Government's firm determination to fulfil the assurances we have given.

Mr. Heffer

We are all assuming, of course, that the EEC Commission's proposals will be accepted, and the whole assumption of the right hon. Gentleman's speech is on this basis. But supposing the Council of Ministers, particularly the French, say, "No, we are not prepared to agree" and veto the proposal of the EEC Commission. What will then be the attitude of the British Government?

Mr. Wood

I must answer the right hon. Gentleman by saying that I have no intention whatsoever of admitting any possibility of our not achieving our objective in this case. I believe that not only have we given undertakings but that they have been taken note of by the whole Community, which realises as well as we do the force and determination behind our desire to achieve our objective.

Sir Elwyn Jones

Does that mean that if the necessity arose Her Majesty's Government would exercise the veto power?

Mr. Wood

I do not think that that is a very helpful addition to our debate. It seems to be an undesirable element to introduce into what will be difficult and delicate negotiations. Clearly, extreme courses are open to us, as they are open to all our partners, but the right hon. and learned Gentleman will agree that it is unwise, so soon after marriage, when one is getting to know one's wife better, to solve any small difficulties that arise by threatening divorce.

Mr. Heffer

This was a shotgun marriage.

Mr. Wood

Like other hon. Members, I should have felt much happier if final agreements had been reached, and I understand perfectly well the anxiety expressed by Jamaica's Minister for Trade and Industry earlier this week. But the arrangements for cane sugar produced in the Commonwealth, important as they are, are only one part of the Community's sugar policy, and I remain confident of success even though the negotiations for future arrangements are likely to be a long process.

The right hon. Member for Lanark (Mrs. Hart) has already outlined the factors which made some reorganisation of the United Kingdon industry desirable—she used strong words—even without the impact of our accession to the European Community. Many hon. Members have expressed anxieties with great feeling about the effect that these changes may have—will have—on employment in the port refineries.

I should like to make perfectly clear to the right hon. Gentleman the Member for Newton (Mr. Frederick Lee) and others that I entirely share these anxieties. But I repeat that changes would have forced reorganisation on the refining industry quite independently of any connection between Great Britain and the European Economic Community.

I felt during several of the speeches this afternoon that certain hon. Members had been seized by a degree of pessimism which was not justified. The Australian imports are likely to continue for some time to come. Also, as I have tried to make clear, we intend to secure the importation of 1.4 million tons from the CSA countries—a large proportion of which would be refined here, as my right hon. Friend said. In addition there is no reason why the 250,000 tons or so which are at present imported for refining and re-export should not continue to be available for refining.

Therefore, although there will be a reduction, the tonnage that is likely to remain for the port refineries does not look like being disastrously or immediately diminished. The industry, therefore, has time to reorganise, no doubt with active help from my right hon. Friend in so far as he is able to give it, as many of our industries have had to do in the past, without having to suffer—perhaps here I shall have the agreement of a number of hon. Gentlemen opposite—anything like the human dislocation which has, for instance, been the lot of the coal industry during the last decade.

Mr. Shore

The crucial factor in the picture which the right hon. Gentleman has described is the Australian supplies. He said that he hoped it would be some time before they were phased out. He has heard the debate. Can he give any more assurance about the length of time which, at present, the Government have in mind, and whether there is anything he can do, first, to prolong that length of time, and second, to encourage alternative cane sugar production from developing Commonwealth countries?

Mr. Wood

I think that I must not give way again or I shall never reach Australia, which is a little further down my pile of notes. I shall come to it shortly and take note of the point made.

My right hon. Friend is engaged in talks with the sugar companies and, as he pointed out, the talks are intended to ensure that the necessary reductions in refining capacity, of which we cannot yet forecast precisely the extent or location, take place in a rational and orderly way, with proper regard for the interests of the work force and the needs of the development areas.

I come now to some of the points which have been raised, which will include the point raised by the right hon. Member for Stepney (Mr. Shore). My right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) mentioned the level of the refining margin in France and suggested that we should have no difficulty in negotiating a proper margin for refiners here because the French margin was already very high.

This comparison is extremely difficult to make, because the two industries are very different. The three French refineries are very small and together produce only a small proportion of the total French output. Moreover, at least 90 per cent. of the production of these refineries consists of special types of sugar, mostly cubes. Our refineries, on the other hand, at present produce about 75 per cent. of the total United Kingdom consumption, and over 90 per cent. of it is in the form of ordinary granulated sugar. Therefore, the position is that, in so far as they are producing ordinary granulated sugar, the French refineries receive a margin which would certainly not be sufficient for our refineries. In fact, the French get their margin from the production of the special sugars, and these can be marketed at a premium which is substantially greater than the extra costs of producing them.

It is, therefore, extremely difficult, as my right hon. Friend will understand, to calculate exactly what the French refiners would need if they were producing ordinary sugar throughout. I doubt that it is a figure as high as the £22 per ton mentioned by my right hon. Friend, but I think it is at least as high as the £17 per ton which our own refiners need, and it is probably higher.

The hon. Member for Greenock (Dr. Dickson Mabon) wanted my right hon. Friend to publish the memorandum of 8th August—these are rather cryptic descriptions but we all know what we mean. I understand from my right hon. Friend that this would be difficult. I can understand why the hon. Member, with his concern for the interests of workers in the refining industry at Greenock, should take this view.

But clearly a negotiation of this kind between three independent companies cannot be conducted in the full blaze of publicity, and certainly the Government have no right to publish a document which sets out for their information, in confidence, the stage which these negotiations had reached in August. I assure the hon. Member, first, that the Government have every intention that only a reorganisation in the national interest should be carried through and, secondly, that the interests of the workers in all the refineries will be fully taken into account. The hon. Member also mentioned that he would like to see my right hon. Friend next month. I believe my right hon. Friend is planning to receive him.

The right hon. Member for Stepney will be pleased to hear that I now come to the question of Australian sugar. This will probably be the last point that I will be able to deal with. I cannot hold out any hope that Australian exports to this country can be phased out over a period longer than three years.

Mr. Shore Why?

Mr. Wood

The provision in the Treaty of Accession, on which the request hangs, is Protocol 16 and this applies during the transitional period, which goes up to the end of 1978.

Mr. Mabon

It is five years.

Mr. Wood

But Australia is in a fundamentally different position from that of the developing countries. The developing countries are heavily dependent on sugar exports for their foreign exchange earnings and employment. Their guaranteed outlet under the CSA represents a high proportion of their total export. Neither of these facts is true for Australia and one cannot argue for special treatment on the basis of need. One can argue only on the basis that what they have enjoyed so far should not be cut off overnight. From this point of view three years is a reasonable time. It is a time which has been mentioned by the Australian Government. Moreover, far from the CSA outlet being of benefit to Australia, it necessitates its selling its sugar at substantially below the world market price.

In a typically forthright speech, the right hon. Member for Newton used an unfortunate phrase. I shall have to check tomorrow but I think that roughly he said that we were conniving with the beet producers against the interests of the Commonwealth sugar producers. It was an unworthy remark which vitiated the rest of his speech, particularly on land, to which I paid great attention, although I did not entirely agree with him.

The problems we have been discussing tonight would be with us whether or not we joined the European Economic Community. They would take a different form if we were not members. We should be renegotiating a continuance of the Commonwealth Sugar Agreement. We should be morally bound to find a market for the sugar produced by the developing countries as we are morally bound as a member of the Community, and we shall succeed.

Similarly, the problems of the sugar refining industry would have to be solved if we were outside the European Community, as they must be solved now that we are a member of it. Therefore, neither our problems nor our opportunities are, in my view, altered by our membership of the Community. I hope that the unanimous acceptance of this motion tonight will add strength to the determination of my right hon. Friend, who was described by the hon. Member for Poplar (Mr. Mikardo), with singular inappropriateness, as defeatist. It will give him strength to carry on the struggle both on behalf of the developing countries and towards a sensible reorganisation of the refining industry.

Question put and agreed to.

Resolved, That this House, recalling the dependence of developing Commonwealth countries, both on the sale of cane sugar to the UK and on orderly marketing through the International Sugar Agreement, accepting the need for the EEC to curtail its own production of beet and to join a new International Sugar Agreement as a major net importer of sugar and, noting the interests of those employed in the sugar refineries on the Clyde, the Mersey and the Thames in the maintenance of a viable refining industry in the UK, calls upon Her Majesty's Government to reaffirm and honour its undertakings to the Commonwealth sugar producers to import 1.4 million tons of cane sugar when the present Commonwealth Sugar Agreement ends and to insist upon major accompanying changes in the sugar policies of the EEC.