HC Deb 21 December 1955 vol 547 cc2063-80

1.44 p.m.

Mr. Frederick Willey (Sunderland, North)

Perhaps I might begin by joining in the congratulations to the hon. Member for Ashford (Mr. Deedes) upon his translation and elevation.

I am sure the House will agree that it is very difficult on this occasion to discuss comprehensively the subject which I am now raising, but the matter has become such an urgent one that I am equally sure the Parliamentary Secretary will welcome an opportunity of saying something about the present pig muddle. When his right hon. Friend revealed to the House that between June, 1954, and November this year no less than £76 million had been spent by way of deficiency payments on pigs whose total market value was only £167 million, he said, in reply to questioners, that it had brought benefit both to producers and consumers—and also to taxpayers."—[OFFICIAL REPORT, 5th December, 1955; Vol. 547, c. 9.] The right hon. Gentleman can seldom have made a statement less related to the facts.

Let us first take the consumers and the retail prices of bacon and pork. If we compare like with like and take reliable figures, such as those provided by the Grocer—in other words, figures comparable with those which I gave the House in March—we find that back rashers, the maximum price of which under a Labour Government was 3s. per lb., in March cost 3s. 10d. per lb., as I then told the House. Today back rashers are selling at 4s. 6d. per lb., and, as the Parliamentary Secretary is aware, that is notwithstanding the drastic reductions which have been made in the last few weeks. Let me now deal with gammon, which I quoted in March. Whereas it was selling at 3s. per lb. under a Labour Government and 4s. 4d. per lb. in March last, this week it is selling at 4s. 10d. per lb. Only a few weeks ago it was selling at 5s. 6d. per lb.

The hon. Gentleman cannot say, as his predecessor used to argue, that at the expense of high prices there is greater consumption, because the consumption of bacon is falling. The hon. Gentleman cannot say that there is any recompense in pork prices, because pork chops, the maximum price of which under a Labour Government was 2s. 10d. per lb., are now selling at 4s. 4d. per lb., and, unlike bacon, the price of pork is still going up. It went up 2d. in the last few weeks.

Whatever pork prices one takes, the same truth emerges, that the retail price is going up. How the right hon. Gentleman can argue that in those circumstances the expenditure of £76 million of the taxpayers' money has brought any relief to consumers, I simply cannot understand. The right hon. Gentleman's Department affects and largely controls the retail prices of bacon because it is still responsible for the release of Danish and Polish bacon.

What do we find from examining the first-hand prices of Danish bacon? We find that, whereas in July, 1954, Danish bacon was selling first-hand at 296s. per cwt., between 7th April and 8th June it was selling at only 220s. per cwt. The hon. Gentleman knows what happened between April and June this year. There was a General Election. It was an absolute disgrace that heavy losses were incurred by the Ministry so that grocers could put up in their shops notices calling attention to the reduction in the retail price of bacon during the General Election.

What happened immediately after the Election? By November, the first-hand price of Danish bacon had risen to 328s. per cwt. In the few months after the Election, during which the Government have been consoling themselves with the result of the Election, the price of bacon released by the Ministry has gone up by more than 100s. per cwt. It is not surprising, in view of that, that retail prices went up. It is true that now the firsthand price has been reduced again to 296s., but it is equally true that the firsthand prices were reduced when we raised the matter in the House of Commons. We can take some credit for having reduced bacon prices in the last few weeks, but I have no confidence in the right hon. Gentleman when he behaves like this. It is clear that Danish bacon prices are affected by political considerations.

Overall, retail prices have gone up. Although they have fallen in the last week or two, they will go up again in the New Year, and even now they are still substantially higher than they were in March, so that the housewife has no consolation for the loss of £76 million by Her Majesty's Government in supporting bacon prices. What benefit has this brought to the taxpayer? It is surely an extraordinary argument that the more one pays, the happier one feels.

What are the facts? In 1951–52 the subsidy on pigs was a little more than £44 million; in 1952–53 it was less, a little more than £38 million; but in 1953–54 it was more than £50 million and in 1954–55 it was £59 million; the estimate for this year is £76½ million. What consolation can the taxpayer get from that? What consolation can the taxpayer get from the fact that in three years the subsidy on pigs has increased by more than £34 million, when the subsidy today is almost twice what it was under a Labour Government when back rashers were selling at 3s. a lb., gammon at 3s. a lb. and pork chops at 2s. 10d.?

I have every sympathy with the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) with his cri de coeur at Question Time. He cried out: How is it possible to defend a policy involving this enormous increase in the agricultural support prices of pigs?"—[OFFICIAL REPORT, 12th December, 1955; Vol. 547, c. 809.] It is an extraordinary theory that if in this dramatic way the burden on the taxpayer is increased, the taxpayer must, according to the right hon. Gentleman's argument, concede that there is some benefit for him.

What about the other people who are affected? Before considering producers, I should like to consider bacon curers. It has been said that bacon curers take everything out of the pig except the squeal. It is the bacon curers themselves who are now squealing. Of what are they complaining? They are complaining, first, of the present uneconomic small throughput. Comparing this year with last, it will be found that, in July, 75,000 fewer pigs went through the bacon factories; in August, 79,000 fewer; in September, 81,000 and in October 89,000 fewer.

The weekly output of the bacon factories for months has been 500 tons less than it was last year. Are the curers not justified in saying that as commercial organisations they are seriously prejudiced? They also say that this is the first time that this has happened since the end of the war and that they cannot now plan ahead, because of the uncertainty of supplies. They have certainly shown that they are in earnest, because they have been obliged to suspend the contribution they were making to the F.M.C. The hon. Gentleman cannot say, any more than he could about retail prices, "People must decide whether they want more pork or bacon," because the number of pigs going to pork has dramatically fallen in the last few months, and it has fallen in an aggravating degree.

The third group of people whom the right hon. Gentleman says should be obliged to him, because he is imposing upon the taxpayers a burden of £76 million, is the producers. The producers have never been as unhappy as they are today. It is only a short time ago that the right hon. Gentleman's predecessor called upon them to produce 1 million more pigs, and then the right hon. Gentleman said that he wanted fewer pigs and the Chancellor of the Exchequer made his unfortunate reference to pig production. What do we find? The September census shows that there are 750,000 fewer pigs than there were twelve months ago. It is no use the right hon. Gentleman being complacent about this.

I have some sympathy with the agricultural Press, which says that the position now is probably much worse than it was at the beginning of September. It was the right hon. Gentleman himself who, in the summer, made the estimate that pig production would fall by 10 per cent. His estimate, like his other estimates, is hopelessly wrong. Pig production now is rapidly falling and—I have called the attention of the House to this time after time—we have greater fluctuations in pig prices than we had pre-war.

Let the farmers speak for themselves. In November, at the time the right hon. Gentleman was so testy because we were complaining of the pig muddle, the Farmer and Stock Breeder said: Our bacon factories complain they are half empty; the number of pigs in England and Wales is down by over three-quarters of a million compared with 12 months ago; the promise for the future is shown by the heavy drop in the numbers of feeding stock and sucklers; and the Fatstock Marketing Corporation cuts its prices. Meantime, bacon prices soar, the Government unloads Danish bacon at a profit instead of at the expected loss. It went on: And the financial troubles which the F.M.C. statement admits, raise other, ugly questions. Overnight the country's meat supply could be in a state of chaos—out of joint, in more ways than one. Let us take, for example, what the Farmer and Stock Breeder has been saying while the right hon. Gentleman has complacently answered Question after Question in the House. It describes this as the "grandfather of all pig crises"; it says there is a "prospect of a pig famine"; it refers to "pandemonium in the pig policy." It alleges "the bottom falls out" and "the storm has broken in earnest"; it speaks of the "calamitous ups and downs"; it says "the whole pig industry is at stake." It complains of the "mess we are now in"; it alleges that "the commercial pig breeder has lost faith"; and that "the industry now finds itself in a position where it is doubtful if even the most efficient producers will scrape through."

It calls our attention to the "transformation in the pig picture since decontrols" which it says is "frightening and mystifying"; it says "the deficiency payment scheme has proved wrong"; and that "new machinery must be devised." Those are not the words of right hon. and hon. Gentlemen on this side of the House. Those are the words of a journal inclined to be favourable towards Her Majesty's Government, a journal which at any rate can claim to be expressing the feelings of the farming community.

However, to show that I am not partial in the choice I make, I will briefly refer also to the Farmers Weekly, which refers to a "crisis," and which has so little confidence in the right hon. Gentleman that it says: Heaven save us from a catastrophe. It also talks about a "mess." It says that the pig marketing muddle has reached a new and more critical stage and goes on: It is a situation which cannot be left any longer in the vain hope that somehow it will work itself out. It goes on to say: The longer the present marketing muddle lasts the greater is the danger not merely to this or that section of the pig business but to the industry as a whole. Apart from the producers' fears, the Government must regard as an alarming consequence the present difficulties of the Fatstock Marketing Corporation. I have mentioned the fact that the curers have been obliged to suspend their contributions. In a few months the F.M.C. has paid out more than £1½ million and its efforts have failed. It has depleted its equalisation fund—and that is producers' money. It has depleted its resources in its courageous endeavour to hold prices stable.

What does the F.M.C. say? It puts the blame fairly and squarely upon the Minister. It says, and I quote, for better accuracy: The root of the trouble lies in official persistence with the wrong interpretation of the facts. While all this has been happening, what has the right hon. Gentleman done? In November he complacently told us, when we called his attention to this disastrous decline in the pig population: I cannot say that I think that the trend over the past nine months has been unsatisfactory."—[OFFICIAL REPORT, 24th November. 1955; Vol. 546, c. 1630.] That is the concern he showed. When we used the word "muddle," he said: … there is no muddle: it is purely a commercial problem."—[OFFICIAL REPORT. 24th November, 1955; Vol. 546, c. 1642.] In December he went the furthest the right hon. Gentleman has gone so far to recognise that there is a real crisis affecting the industry. He said: I am not satisfied that the best way of marketing pigs has yet been found and applied."—[OFFICIAL REPORT, 12th December. 1955; Vol. 547, c. 810.] A few days ago he was gracious enough to say that his officers were ready to discuss with the National Farmers' Union the future form of the guarantees within, of course, the amount laid down by the February Review.

I should have thought that if anything should disturb the right hon. Gentleman it would be this disastrous muddle affecting pigs and pig production. I know that the right hon. Gentleman may feel immune. He has been through crisis after crisis, and muddle after muddle, but I should have thought that the present pig muddle is due to unprecedented, monumental folly.

It is no use saying that he has referred the general question to, and that he is awaiting the advice of, the Reorganisation Commission. It would be quite different if we had not had all the inquiries of the 'thirties. The right hon. Gentleman has no right to await such advice. The advice has all been tendered in the past. The only difference is that now we have a far worse muddle than ever before in the industry. What we want is action.

Everybody knows how moderate is my right hon. Friend the Member for Don Valley (Mr. T. Williams), and I will conclude by quoting his words. He said that the Government's policy has not brought stability, that it is nothing else than "just plain nonsense." The sooner action was taken the better, and I hope that the Joint Parliamentary Secretary will take the opportunity to say something that will allay the present fears which are disturbing everyone connected with the industry.

2.4 p.m.

Major H. Legge-Bourke (Isle of Ely)

We have just listened to an astonishing speech in which the hon. Member for Sunderland, North (Mr. Willey) was trying to make the maximum of capital out of certain things which have happened which are no longer the responsibility of the Government. The hon. Member really asked that the Government should again take responsibilities which are characteristic of Socialist Governments.

Mr. Willey

Perhaps the hon. and gallant Gentleman did not hear me when I began my speech. All my remarks related to the £76 million of taxpayers' money that has gone into this business.

Major Legge-Bourke

I appreciate that, as long as we have a system of guarantees of market prices under the Agriculture Act, there is a responsibility on the House and the Government to decide each year what measure of support should be given. That I appreciate and certainly I do not wish to see it altered, but the hon. Member's main intention really was to show that the operation of that system, the actual distribution of the support agreed in the Price Review, is faulty.

The important point which he overlooked is that now the guarantee is operated by an organisation over which the Government have no control at all. The Price Review now operates in such a way in respect of meat that the Minister, in his capacity of Minister of Food, as well as Minister of Agriculture, no longer has the control which the hon. Member, when he was Under-Secretary at the Ministry of Food, must have so enjoyed in controlling the industry. Personally, I should regard it as a most retrograde step if, as a result of what the hon. Gentleman said today, my hon. Friend the Parliamentary Secretary were to say that he now proposes to advise the Minister of Agriculture to go back into the actual operation of the affairs of the Fatstock Marketing Corporation and the auctions.

I remember very well when the market was just becoming free again that certain steps were taken by the National Farmers' Union to attempt to set up a complete Fatstock Marketing Board. The decision was given that that was perhaps premature, and eventually the National Farmers' Union made the suggestion about the Fatstock Marketing Corporation. There is no doubt that had not that Corporation been in existence there would have been a far bigger upheaval in the disposal of fatstock of all kinds than happened in the event.

Although we fully appreciate, as I think the Corporation itself appreciates, that there were growing pains, we realise that to change suddenly from a system which had been in operation for fourteen years without having a few difficulties and adjustments would have been expecting the impossible. Nevertheless, the Corporation has done a very good job. I know that there was a stage during which perhaps it did divert to the auctions certain animals which need not have been sent there and as a result it was, to some extent, using the guarantees for purposes which we had not primarily intended when we approved them. However, I think that that has stopped now.

What the hon. Member has not given the Government nearly enough credit for is the fact that they have set up a committee to look into the whole of the pig marketing operations. That Committee has not yet rendered its final report. I should have thought that the hon. Gentleman was the last person to have expected the gentlemen in Whitehall, to whom I am sure he is deeply grateful for the assistance they gave him when he was in office, to know more about the operation of the pig marketing organisation than those directly concerned in it—the producers as well as those concerned in other ways.

I hope that my hon. Friend will not feel that the hon. Member for Sunderland, North has in any way made a valid point. He has suggested that the committee which is now arguing on the matter, with expert advice, should be completely overruled by the Government stepping in right over its head while it is still considering the whole problem and before it has rendered its report, to bring back again the strait-jacket of State control.

The hon. Member has been arguing the same case as he and his hon. Friends argued during the General Election. They want a return of rationing and control and all those horrible things which the electorate felt, after the Election, they had got rid of for ever. I hope that my hon. Friend will strongly resist what has been said by the hon. Gentleman.

2.10 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. G. R. H. Nugent)

I regret that we are rather pressed for time and that other hon. Members cannot take part in the debate. I am sure they will understand that other debates are to follow and that we must try to finish this one as near as we can to the appointed time. I appreciate the strong interests of hon. Members on both sides and I know that there are others who would have liked to take part.

Lieut.-Colonel Marcus Lipton (Brixton)

With only three Government supporters present.

Mr. Nugent

And only four, I see, on the other side of the House.

Lieut.-Colonel Lipton

But they are four representatives of agricultural constituencies.

Mr. Nugent

No doubt this is the time of day when one is interested in eating pork and bacon rather than talking about it. Be that as it may, I understand the great interest which hon. Members have in this subject, and I am sorry that there is not more time in which we could debate it.

I am grateful to the hon. Member for Sunderland, North (Mr. Wiley) for this opportunity to reply on this subject. It is a very complex matter, but there are good answers to the weighty accusations he made against me and I will see whether I can now reply to them. First, let me deal with the main charges. The hon. Gentleman brought three main charges against us: first, that the consumer's interest has been neglected; secondly, that the taxpayer's interest has been neglected; and, thirdly, that the producer's interest has been neglected.

I will deal first with the consumer's interest. Today, the retail price of back rashers, which I think is the best indication of the demand price, is 4s. per lb.—

Mr. Sidney Dye (Norfolk, South-West)

No.

Mr. Nugent

That is the price in the multiple stores. The price has been going down in recent days and hon. Members may not have the latest figure.

Mr. Dye

I have been in Leadenhall this morning.

Mr. Nugent

In Leadenhall one does not pay the retail price, one pays the wholesale price.

That figure of 4s. per lb. compares with the price of 4s. 4d. for back rashers immediately before the control came off. I will admit straight away to the hon. Gentleman that the price of bacon this autumn has been high; indeed, in November it reached the high point of 5s. 2d. per 1b. But, as I say, it has come down to 4s.—I am speaking throughout of the price of back rashers as the best indication.

Certainly, in the earlier part of the year it was a good deal lower. For the first five months the price was more or less continuously under 4s., and in April the price of back rashers fell to the low point of 3s. per 1b. But that was a level at which home production and imports would have been uneconomic and it was clear that, in due course, the demand would strengthen again and the price would recover. I say again that the movement of bacon prices and the release of imported supplies has been actuated throughout by the need to meet consumer demand with the combined supply of imported and home production.

Mr. Wiley

I apologise for interrupting the hon. Gentleman; I realise that he has a lot to say. But will he deal with the figures which I have given to him? We have had this out before. I quoted to him figures from sources available to the hon. Gentleman, and the same sources from which I quoted in March, so that the figures which I have given are related. If the hon. Gentleman wishes to challenge them, he should either challenge the sources or deal with those figures. It does not help the debate to produce other figures to prove that, perhaps, in some obscure quarter of the East End, it is possible to buy cheaper bacon.

Mr. Nugent

No, I can assure the hon. Gentleman straight away that the figure I have given is the reliable retail price today. The figures I ha re given are perfectly accurate.

On this question of 'he price of bacon, and the accusations made that my right hon. Friend and I were influenced by political considerations, I give the assurance, which has been given before by my right hon. Friend, that we have never been influenced in the release of imported bacon by anything other than consumer interest and in order to get a fair supply coming forward. In the spring months of this year demand was very weak indeed and insufficient to take up the current supplies. The result was that the market fell.

I will concede to the hon. Member that the price of fresh pork today is higher than it was under control, but not so very much higher. I make the point that, on the other hand, the quality of the pork today makes it quite a different food. In the last year our producers have studied the pork market and today they are producing joints of pork of the kind which the housewife wants. There is nothing like so much being cut to waste, the quality is really good, and the article which the housewife is getting is of far better value.

On the question of the volume of consumption, which to the consumer is of equal importance with the price, in the first 12 months since decontrol the volume of consumption of all meat, that is, beef, mutton, lamb, pork and bacon, was 115 lb. per head—that is within 3 lb. of the pre-war consumption. In the last year, under decontrol, we were 17 per cent. higher than in the last year under control and no less than nearly 60 per cent. higher than during the last year of Socialist Government in 1951. Those are factors which I am sure should be taken into account when considering whether or not the consumer has benefited.

I wish to make the point, which is of great weight indeed, that the consumer today has a choice. No one will contend that, with the ending of meat rationing, and free choice for the consumer, the housewife in particular has not enjoyed a great benefit which was welcomed in every household in the country. So much for the consumer. I say roundly that the charge of the hon. Member regarding consumer interest has failed. Today, the consumer has a far more plentiful supply with a free choice, and retail prices are not substantially higher. In fact, prices of bacon are lower than at the time of control, and pork prices are only a little higher with the quality very much higher.

Turning to the taxpayer interest, the figure for the cost of subsidy in 1953–54 was £50½3 million. In 1954–55, which was the last year of partial control and partial freedom—about three months of control and nine months freedom—the figure was £59 million. For the current year, 1955–56, the estimate is £78 million, but the actual figure for the current year, for the first eight months, is £35½8 million. These figures can be judged only if set against the actual volume of clean pigs coming on to the market. For 1953–54 we have an overall through-put of 8½5 million and in 1954–55, 10½8 million. In others words, there is an increase of nearly 25 per cent. In the present year, 1955–56, the estimate is 9½4 million. In other words, it is still 10 per cent. higher than in the last full year of control, when the cost was £50½3 million.

The picture we get from that is that the taxpayer, for the year 1954–55, when there was more freedom than control, has paid about 18 per cent. more on the subsidies and has about 25 per cent. more volume. It is too early yet to say exactly how it will work out in the current year, but there is 10 per cent. more volume to consider against, whatever is the final cost to the Exchequer. But, from the way it is running, it is evident that the figure will be significantly less than £76 million—

Mr. Dye rose—

Mr. Nugent

I am sorry, but I cannot give way.

Mr. Dye

Why not give the number of pigs for October 1955, and 1954?

Mr. Nugent

In this context I should pay tribute to our producers who, during the current year, have produced a better quality pig which more nearly meets the requirements of the consumer. The result has been that they have been making a better market price at a lower cost to the Exchequer. They have reduced their dependence on public funds. I think that those figures fully bear out my contention that the taxpayer is getting good value.

The charge has been made that there has been an excessive drop in producers' returns, especially in the past few weeks. I accept straight away that there have been anxieties among producers in the last week or so about pork prices, and perhaps even more so over the past few weeks about bacon prices. If I address my remarks to the question of bacon prices, I think I can make my point most clear. I will use the quotations of the F.M.C., because it handles 90 per cent. of the bacon pigs.

The F.M.C's price for the week beginning 14th November was 52s. 6d. a score dead-weight for Grade A bacon weight pigs. The following week it was 52s.; the next week, 51s.; at the beginning of December it was 46s. 2d. minimum; and for the week beginning 12th December it was 43s. 7d. minimum. That shows a drop of about 9s. a score. I concede straight away that if that were the end of the story it would be a very serious matter for producers, but there are the deadweight payments to come. In fact, the dead-weight payment for the week beginning 5th December—when the F.M.C. quoted a price of 46s. 2d.—is 7s. 2d. a score, which would enable the Corporation to pay over 53s. a score.

For the following week, when its quotation was 43s. 7d., the dead-weight payment, which has not yet been announced, is estimated to be between 10s. and 15s. a score, which would enable F.M.C. and similar trading organisations to pay between 53s. and 57s. dead-weight per score if they wish to.

Mr. Willey

And this, of course, affects the subsidy.

Mr. Nugent

It does not disturb our estimates. We have made adequate and reasonable provision in our subsidies, and these are payments to which producers are entitled by reason of the guarantees we have provided. When markets fluctuate we step in with the guarantees.

In the light of these figures, it would seem that some people have been a little hasty in jumping to conclusions about what had really happened to the market. They had made their reckoning without taking into account the full effect of Government guarantees, which are there especially to deal with such a situation as this, and which will do so. I cannot say exactly what the F.M.C. or any other trading organisation will pay. The F.M.C. has to consider its equalisation fund, and the question of building it up again. But those are the dead-weight payments which they will receive, and those are the sort of final returns they can make to the producer if they think it right. Similar payments will apply in the case of pork pigs in the markets. There the individual guaranteed payments will bring producers' returns up. That disposes of the main charge of unreasonable fluctuations in the bacon pig market.

There is one other allegation, which the hon. Member did not make but which has been in the minds of many, namely, that there has been an altogether unreasonable release of imports of bacon which has caused the bacon market to collapse. In fact, the total supplies of bacon on the market in the past three months—October, November and December—have been slightly less than they were last year and the year before. Once again, we are influenced only by the need to meet the consumer demand with a combination of home supplies and imported. I have the relevant figures here if hon. Members wish to have them. It is quite clear that this is not a case of imports upsetting the market. In fact, if the market had been supplied with anything less it would clearly have been unfair to consumers.

I should like to say a few words about the way in which these guarantees work, because I acknowledge at once that they are extremely complex. At the Annual Price Review every year we guarantee a standard price for all clean pigs. For the current year it is 51s. 3d. per score dead-weight. If the realisation price for all clean pigs sold—that is, pork and bacon pigs—is less, on average, than this price, we pay a deficiency payment which makes up the average of all prices obtained to the guaranteed price level of 51s. 3d. This deficiency payment is paid upon a monthly basis, calculated upon the results of the previous twelve months. It is also linked with the feeding stuffs formula, so that as the feeding stuffs price goes up or down the standard price of 51s. 3d. in effect goes up or down with it.

Then there is the other feature, the individual price guarantee. The purpose of this is to ensure the producer against unreasonable or unfair market fluctuations. A guaranteed price is provided for every clean animal sold in the auction markets, so that if the realisation price for the animal is less than the individual price guarantee we make up the difference. There is then a further refinement, called the market addition. Sometimes, for weeks or months at a time, the realisation price in the markets may be less than the individual price guarantee.

This would have the result of the producer being insulated from market influences and, in order to make the market bite, so to speak, and ensure that good producers get more for their pigs than bad producers, we pay a market addition designed to bring the average market price above the individual price guarantee. That prevents a flat price being paid to all, and ensures that there is a reasonable differential for quality.

Mr. R. E. Winterbottom (Sheffield, Brightside)

Will the Minister say how the price in the last three months has compared with the corresponding price 12 months ago?

Mr. Nugent

It would be better if I completed this very complex description first. It is of considerable interest not only here but outside the House. Both these payments are taken into account in calculating the collective deficiency payment. The individual price guarantee and the market addition are calculated only in the auction markets. They are transferred to the bacon pig and deadweight sales by means of what is called a dead-weight payment, which is calculated by reference to the average of all individual price guarantee and market addition payments in the auction markets, per score, and transferred direct to each pig sold, either dead-weight or in the bacon markets.

That sum is paid either to the individual producer or, as a lump sum, to the Fatstock Marketing Corporation and similar trading agencies, who then pay it to the producers either in whole or in part, as they think best. I have given the Corporation's published weekly quotations which will have taken into account not only the price it receives from the bacon curers, but also what it expects to receive by way of these dead-weight and other guarantee payments.

I think I have been able to throw some light upon this rather complex subject. [HON. MEMBERS: "Oh."] If hon. Members have not been able to absorb all the complexities straight away, I hope that if they are interested they will study what I have said in the OFFICIAL REPORT.

Lieut.-Colonel Lipton

Issue a White Paper on it.

Mr. Nugent

There is one other matter, namely, the question of the variation of returns, of which the hon. Member for Sunderland, North accused us. In fact, taking the guaranteed standard price of 51s, 3d. for the current year, the variations have averaged about 10 per cent. on either side. That is not an unreasonable variation; in fact, it is a little less than pre-war. I have had the relevant figures looked up and can say that in the years 1934 and 1935 the average variation was about 12 per cent. on either side of the middle price, as compared with about 10 per cent. now. Once again, this charge was not well founded.

The system of guarantees that we have devised is not intended to return a flat price to producers but to moderate the variations. A certain amount of fluctuation is inevitable, and, indeed, is proper in this market. Here we have a market for pigs, where a little more than half of the pigs go for pork and manufacture and a little less for bacon. Both these demands fluctuate, sometimes in opposite directions. Sometimes the housewife wishes to buy bacon and would like some extra, or she decides that she does not want to buy pork and would prefer beef or lamb. At other times she wants to buy pork and does not want to buy bacon. Perhaps she wants to buy both it all depends upon the season and her taste at the time. Inevitably, there is bound to be fluctuation in demand, and some fluctuation in supply as well.

The job of the producer is not to produce a pig to please the hon. Member for Sunderland, North or to please me, but to satisfy the housewife and to get the pork or bacon on to her table when she wants it and at the quality she wants. The man who succeeds in getting the right quality pork on the housewife's table at the right time should get more than the man who fails to do so. It is, therefore, right and proper that producer prices should bear some relationship to the fluctuations of supply and demand. The object of our guarantees has been to remove excessive fluctuations, but not what we think are reasonable fluctuations, so that the man who succeeds in meeting the demand will get the additional reward.

No one would maintain that the system is perfect. As my right hon. Friend has said, we are glad to receive suggestions about how to make it work better. We hope that the consideration which is being given to the marketing system by the Reorganisation Commission and the Report that is to follow will help us in this context. In the meantime we have invited the N.F.U. to consult with us about improvements which might be made to the guarantee structure.

Lieut.-Colonel Lipton

To the basic structure?

Mr. Nugent

Yes. We are not discussing price levels but the structure of the guarantee system in order to see whether there is any way by which we can improve it.

I make the point advisedly that when the charges made by the hon. Member for Sunderland, North against me and against the Government are examined in the light of the facts I have given the House, they fall to the ground. The hon. Gentleman is simply left with his basic conviction or prejudice that he prefers State trading to a free market. We know that he dislikes the free market, which inevitably fluctuates. Our system of guarantees protects the producer against excessive fluctuations. Our system of a return to a free market ensures the consumer and the housewife that they can have their choice. The hon. Member knows that if he went back to his system of State trading he could not give choice to the consumer.

Mr. Willey

I have made no such suggestion. I realise that there are matters to be discussed following this, but I would willingly discuss my proposals on another occasion with the hon. Gentleman.

Mr. Nugent

We have discussed them on previous occasions, and no doubt we shall do so again. I have stated the hon. Gentleman's view. He and his hon. Friends put them on record, as my hon. and gallant Friend the Member for Isle of Ely (Major Legge-Bourke) has already said, during the General Election. I say advisedly, as I have said before, that a system of the kind preferred by the hon. Member cannot give choice to the housewife and must lead back to allocation and rationing. The present system is serving well to meet the needs and the interests of producers, consumers and taxpayers.

Mr. Dye

How many fewer pigs went to the market and to the bacon factories in October as compared with October last year? Is not the figure 240,000?

Mr. Nugent

Does the hon. Gentleman mean that 240,000 fewer went to market in October this year? It is not possible to judge these things without taking a period of several months. October, which the hon. Gentleman has chosen, was the peak month of 1954, following the summer months. The actual figure, from 10th October to 6th November, is 235,000 per week, compared with 180,000 per week this year.

Lieut.-Colonel Lipton

On a point of order, Mr. Deputy-Speaker. I understood from the Order Paper that an hour was to be allocated to this discussion. It seems that for some reason the only topic that has been touched on has been the subject of pigs.

Mr. Deputy-Speaker (Sir Rhys Hopkin Morris)

We are behind the time-table even now.