HC Deb 21 March 1955 vol 538 cc1829-38

Motion made, and Question proposed, That the Fatstock (Guarantee Payments) Order, 1955, dated 7th March, 1955, a copy of which was laid before this House on 8th March, be approved.—[Mr. R. Allan.]

Mr. Ede (South Shields)

Are we not to have any explanation of the Order from the Government Front Bench? Is not the Joint Under-Secretary of State for Scotland competent to deal with it?

8.8 p.m.

The Joint Under-Secretary of State for Scotland (Mr. Henderson Stewart)

This Order was, of course, placed on the Table by the Minister of Agriculture and the Minister of Food. The reason for that was that it is the Minister of Agriculture and the Minister of Food who is now responsible for this matter. Under arrangements of which the House is aware, the Secretary of State for Scotland will, on, I think, 1st April next, take over from the Minister of Food some of his duties, including those referred to in this Order, in relation to Scotland.

My right hon. Friend the Secretary of State for Scotland is, therefore, not directly concerned at this moment. On the other hand, because he will become responsible on 1st April, he feels himself at the present moment, as it were unofficially, jointly responsible for these matters. He will, in fact, become jointly responsible, so far as the Scottish side is concerned, on 1st April.

The purpose of the Order is merely, if one might use the word, to formalise—to give Parliamentary form to—the arrangements which were made last year for a change in the price procedure. It is thought that the guarantees which were announced some months ago should be incorporated in a Statutory Instrument of this kind. The scheme now in operation is not in any sense altered by this Order. Even if one takes Article 11, where there would appear to be some slight change, I would point out that it is a change in form rather than anything else.

What Article 11 does is to provide that in any future arrangements different guarantees may be applied in different parts of the country. There may be, for example, one set of arrangements for England, another for Scotland, and another for Northern Ireland. At present there is only one United Kingdom arrangement, and there is no present intention of altering that. All this Order does is to make it possible, if in future it is thought wise to have different arrangements, to make those arrangements officially applicable. Therefore, that article is in a sense an enabling one.

In every other respect, I think I am right in saying that all we are considering here is the present system of fatstock guarantee payments, and we are merely giving it greater statutory form then it at present enjoys. For that reason, it was thought necessary to lay this Order, and I hope that the House will accept it

8.10 p.m.

Mr. Thomas Williams (Don Valley)

After that very illuminating description of this Order, I am sure that its meaning will be transparently clear to every hon. Member. I am glad the Joint Under-Secretary of State for Scotland did not quote from the Order. He might possibly have tended to confuse the House if he had done so. I am afraid, however, that something has gone wrong, and it is perhaps as well that the hon. Gentleman was in his place, otherwise the Government would not have got their Order.

This Order, as I understand it, simply transforms the fatstock guarantee payments system from what it was—merely a temporary scheme—into what it is now hoped will be a permanent scheme. I am not sure that it will become permanent, although perhaps it is more permanent than it was under the temporary arrangements made in 1945. It is as well the hon. Gentleman did not quote from the Order. If he had done so, I think he would certainly have confused many hon. Members, who would have blinked at the language used, although, as I understand it, no other language would have been suitable for the occasion.

For instance, Article 5 (2) says: Where, in connection with any sale taken into account for the purpose of calculating any average price, any payment was made—

  1. (a) under the 1954 scheme by way of individual guarantee payment, percentage addition, quality premium or deadweight guarantee payment within the meaning of that scheme; or
  2. (b) under article six, seven, eight or nine of this Order.
that payment shall be treated for the purposes of that calculation as having formed part of the price paid on that sale. That is just about as clear as mud. I think I know what it really means, but I am afraid that many hon. Members would not understand it very quickly. In any case, there must be a basis for what we call the average market realisation price, but I suppose this system is as good as any other, and that set of words is as good as any other, too.

All this arises out of the change-over from guaranteed price to a deficiency payment—from the complex to the simple, so we are told. It is so simple that only one in 10,000 will understand it. However, I do not propose to argue the principle of this fatstock payments scheme tonight. I do not think this is quite the occasion. This Order is purely a machinery Order, and whether the machinery is good, bad, or indifferent, experience alone will tell.

I should like to ask the hon. Gentleman one or two questions, of which I am sorry I could not have given him notice because I did not expect that he would be the responsible Minister for this purpose tonight. I should like to know what is meant in Articles 6 and 7, in which the words The … Minister may, if he thinks fit …" are repeated three times. What is going to help him to think fit? What will prevent him from thinking fit? Perhaps the hon. Gentleman will be good enough to tell us exactly what those words mean.

Then I would draw the hon. Gentleman's attention to Article 10 (4), which deals with a carcase being certified as unfit for human consumption. I am sure that some suitable arrangement has been made, but I should like to know what will happen if an animal is sold at a live auction mart. It may or may not be slaughtered that day or the next day or the day after. Will the seller receive his cash before slaughter, even though after slaughter it is found that the animal or the carcase is unfit for human consumption?

Perhaps the hon. Gentleman will tell us, because I had an experience at Leyton-stone before the war when we saw within the confines of the abattoir two local authority meat inspectors who inspected every carcase. There, for our special edification that morning, at least one pig, apparently well and hearty and free from any form of disease, was opened up and was found to be totally unfit for human consumption.

I should like to know what the procedure is. When does the seller in the live auction mart get paid, and who is punished for the unfit condition of the carcase? The example which I have quoted can be paralleled all over the country; and with this mixed system of live auction marts and sales on deadweight basis we ought to know exactly what the machinery really is.

Turning to Article 10 (3, b), I should like to know how a certifying officer is satisfied that a carcase is not intended for consumption in the producer's household. The words state clearly enough that no payment will be made if the carcase is destined for the producer's home. I should like to know how the certifying officer satisfies himself that the carcase is to be sold in the butcher's shop and is not to be consumed in his home.

Finally, I should like to know how prices are moving in the livestock auction mart compared with prices paid on a deadweight basis when animals are slaughtered by the Farmers' Marketing Corporation. I hope that there is some similarity between them, but perhaps the hon. Gentleman will tell us what the relationship between the prices really is.

We are not going to oppose this Order because, I repeat, it is merely a piece of machinery. The principle can, perhaps, be debated on a more appropriate occasion, but we are entitled to receive answers to the questions which have been put. Then we shall watch the progress of this highly complex system that is now in operation—the Order suggests for all time, but which we doubt very much will be the case. Indeed, if I were to make one last observation about the Order, it would be that it is not likely to become permanent because it is too complex for the Departmental officers, the producers and the consumers to understand.

I know that the Treasury has a vested interest in the efficiency and effectiveness of the system, but whether it is going to work out as a better, more efficient and more effective system than guaranteed prices, which are known before the animal is taken to market, remains to be seen. I hope, therefore, that we shall receive answers to these questions.

8.20 p.m.

Major H. Legge-Bourke (Isle of Ely)

I am glad that the right hon. Member for Don Valley (Mr. T. Williams) does not intend to oppose the Order. I wish to support it, and, although the right hon. Gentleman does not think so, I believe that the Order will help a great many people to understand more clearly than they have understood up to now exactly what is involved in implementing the guarantees under the Act.

But I want to draw the attention of the House to the fact that there is some cause for concern—I put it no higher than that—at the great number of not-very-forward store cattle which are being slaughtered for immediate consumption. If we are to operate Article 10 of the Order, it is important that this matter should be borne in mind by the Minister, because Article 10 lays down the various stipulations applying to the certification of these animals, whether live or in carcase form. There is no question that, both in this country and in Ireland, there has, owing to public taste, been slaughtering of not-very-forward store cattle on an unprecedented scale over the last few months.

The serious aspect is that if the process continues we shall gradually see the operation of the law of diminishing returns, because the young stock coming on will not mature, and we shall gradually produce less and less meat although we shall have a bigger and bigger head of stock at any one time. It is important that this matter should be investigated most seriously. Although I do not think a danger point has yet been reached, if the present trend continues we shall be short of bulk, although a very high quality of meat may be consumed, from the United Kingdom and Southern Ireland production.

I am producing beef in Southern Ireland, and the same thing is happening there as is happening in this country. This morning I was in Cambridge market, and I was talking to several people whom I know quite well. They told me about the same thing—the enormous number of animals coming forward for slaughter which ought not to be slaughtered for another six or eight months or even a year.

This shows that public taste has changed since before the war. No one wishes to criticise the public for having changed its taste; it is right that we should allow public taste to change. But it is important to take notice of the change and to look ahead, because we must ensure that the plans which have been made for an increase in agricultural production work out successfully. I am quite certain that if this taste for lean beef continues to be met substantially by the home production, something will have to be done to ensure that we do not go on slaughtering animals which are not fit for slaughter, and which ought to be kept for another six months or even a year. I hope the Minister will bear that matter in mind, because it is important.

The only other point I wish to make is one which was raised by the right hon. Member for Don Valley—what is meant by the words, "the Minister may" in Articles 6 and 7? One point which interested me a great deal, even when the right hon. Member for Don Valley was Minister for Agriculture, was the possibility of using differential subsidies to meet varying needs. It seems to me that the words "the Minister may" would allow the Minister power to adopt differential subsidies as between the small man and the large man or between a man living in a marginal area and a man living in a good farming area. If the Minister could find a way of operating that system, I believe that he would have power to do so.

So far, no one has found a way of operating differential subsidies, but I am sure that we must go on with the search because I am certain that the country is now awakening to the fact that we cannot afford to give blanket guarantees whether they are needed or not.

I believe that the latest Price Review has been very well received by the farming industry and I congratulate the Minister upon it, but I am sure that if we want to reduce the Treasury contribution and to ease the burden on the taxpayer we must continue our search to ensure that whatever is paid from the taxpayer in subsidy is directed to where it is needed most, and diverted from where it is needed least.

That is an extremely difficult problem, but I think that Article 6 of the Order provides the opportunity if the way should ever be found. I would prefer the example of the smallholder who is producing pigs and who needs a steady price more than does the big man who can perhaps grow feedingstuffs for his own pigs. At the moment I do not see, and I do not think anyone in the N.F.U. or elsewhere has found, a way of doing this, but we must go on looking for it, and I hope the Order will encourage every one concerned to do so.

8.26 p.m.

The Parliamentary Secretary to the Ministry of Food (Dr. Charles Hill)

Perhaps I may seek to reply to the questions put by the right hon. Member for Don Valley (Mr. T. Williams). The first point which he made concerned payments and the governing of payments, both under collective guarantees and under individual guarantees, by the words "if the Minister thinks fit."

We are advised that it is necessary to have that reservation, for there are certain rare circumstances in which it is proper for the Minister not to make payment. There have been one or two such instances, one which culminated in a prosecution for fraudulent offences, including putting animals through more than once, when it was necessary to retain outstanding moneys until the matter had been settled. I can assure the right hon. Gentleman and my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) that for such exceptional circumstances it is thought necessary for the Minister to have that reserve power.

The right hon. Gentleman's second point related to the position under Article 10 (2, c) where the animal is slaughtered for the producer's own butchery business and is not intended for consumption in the producer's household. The butcher is required to make a declaration to that effect. It is useless to pretend that it is possible, by enforcement or any other method, to ensure with certainty that that declaration is observed, but the point is recognised, and the producer is required to sign a declaration to the effect that the meat is not intended for consumption in his household, as part of the requirements of the scheme.

The right hon. Member asked what happened under Article 10 (4) when there is condemnation on the ground of disease. As he implied, the article relates to where the carcase has been certified, but he put his question in relation to the auction sale of a live animal. The animal, in part or in whole, having subsequently been condemned, it is not possible—as I think the right hon. Member will agree—to track matters back so as to influence the payment which is made in respect of the sale. To put the answer bluntly, there is no recapture of deficiency payment; there is no recapture where such circumstances obtain.

The right hon. Member will appreciate that an animal which is obviously emaciated or diseased from the beginning will be excluded from the deficiency payment arrangements as not falling within the categories in respect of which those payments are made. But, should such an animal pass the scrutiny of the certifying officer and achieve a price at the auction sales, the position is that if condemnation subsequently takes place, no steps would be taken, indeed, no steps could be taken, to recover money which has been paid in respect of the auction transaction.

Mr. T. Williams

That is quite clear to me. I saw the difficulty when I saw the provision, but, to make it clearer still, perhaps the hon. Gentleman could tell us this. The producer takes to the livestock market one or more animals which are put up for auction and sold at "X" price. He is only assured of the price he receives, he is assured of the price at which the animal is knocked down at the auction mart. The only loser, therefore, can be the buyer. He loses to the extent of the loss of the deficiency payment, the individual guarantee and the standard price. Does the buyer have any redress, having purchased the animal on the hoof and not knowing what its internals look like until they are opened up? He is the only person likely to lose, if the animal is unfit for human consumption?

Dr. Hill

The right hon. Gentleman is correct. The man has made his bid for the animal of his choice. If subsequently it emerges that the animal is diseased and wholly unfit for human consumption, his is the loss.

The right hon. Member asked for a comparison between live weight and dead weight prices. He will appreciate that we cannot readily compare F.M.C. and auction prices because F.M.C. prices include the guarantees and auction prices do not. That makes the comparison more difficult. Obviously the F.M.C. quotes the price based on knowledge and assessment of market prices, as does the butcher in the auction market. I cannot give a precise answer to the question except to say that, in general, the relationship is satisfactory but it is based on an assessment of a future market position and is bound from time to time to reveal disparities. We are watching the position, and in general we are satisfied that it is satisfactory.

My hon. and gallant Friend the Member for the Isle of Ely raised the question of the slaughter of immature stock. He will realise that we reject store stock in the live markets for subsidy, but it is true that some immature stock has been slaughtered, such has been the demand for home-killed meat. Sometimes that slaughtering has come about because of a shortage of winter feed. We do not think it has happened to an extent nor on a scale which will affect future supplies. One must be cautious in assessing what is happening without full statistical data, but, generally, our present opinion is that it will not affect future supplies. Those are the main considerations.

I did not follow the right hon. Gentleman's reference to the complexity of the scheme. A scheme that involves both a collective and an individual guarantee is complex, but the Order sets down for the scrutiny of the House the arrangements that have been made. I say to the right hon. Gentleman, in conclusion, that in respect of comparable schemes for other commodities from time to time, it is proposed to make Orders under Section 4 of the Act and to bring them to the House for its scrutiny and approval.

8.35 p.m.

Mr. Ede (South Shields)

There was one omission in the hon. Gentleman's speech. He forgot to thank the Joint Under-Secretary of State for Scotland for explaining an Order which, I understand, is not his concern but is the concern of the hon. Gentleman. The Joint Under-Secretary of State for Scotland did it with a suavity that indicated that he realised for whom he was speaking.

I should like to express my thanks, and the thanks of those of us on this side of the House, for the courtesy of the Joint Under-Secretary of State for Scotland in stepping into the breach in the way that he did. It might also have been more fitting had the Parliamentary Secretary to the Ministry of Food expressed some regret to the House that he was not here until nine minutes after the discussion of an Order for which he was responsible had started.

Dr. Hill

I do express such regret and join in the thanks to my hon. Friend the Joint Under-Secretary. The only point I would make is that the Order is signed by one of the appropriate Ministers and my hon. Friend does represent another of the appropriate Ministers.

Mr. Ede

But he explained that that Minister had no responsibility.

Question put and agreed to.

Resolved, That the Fatstock (Guarantee Payments) Order, 1955, dated 7th March, 1955, a copy of which was laid before this House on 8th March, be approved.