§ 8.31 p.m.
The Minister of Agriculture, Fisheries and Food (Mr. Derick Heathcoat Amory)
I beg to move,That the Draft British Egg Marketing Scheme, 1956, a copy of which was laid before this House on 8th November, be approved.Agriculture is an industry with many facets. Recently, the cereal harvest, cattle and pigs have been in our thoughts. This evening, I must ask the House to concentrate its attention on eggs. This Marketing Scheme has been promoted by the three farmers' unions in accordance with the provisions of the Agricultural Marketing Acts.
Hon. Members may recall that the Government's White Paper on the Decontrol of Food and the Marketing of Agricultural Produce, in 1953. said that the present interim arrangements would be continued until more permanent marketing arrangements could be introduced. The interim arrangements were designed to leave scope for a producers' marketing board. During our talks with the unions in 1954. the Government agreed to a form in which the guaranteed arrangements could be implemented, if a marketing board with full trading powers was established. It was then for the farmers' unions to decide whether. in fact, they wished to promote a marketing scheme.
In fact, they did so and the unions' draft Scheme was formally submitted in October, 1955. Since then, it has passed through the various procedures laid down in the Agricultural Marketing Acts. There was a large number of objections and representations and the Scheme was subjected to a lengthy—rather unusually lengthy—public inquiry. I should like to pay tribute to the patience and thoroughness with which the Commissioner, Mr. G. G. Baker, O.B.E., Q.C., conducted that inquiry and to the fairness of his conclusions.
After considering the objections and the Report of the Commissioner, which was published last June as a White Paper, the agricultural Ministers decided that the Scheme should be allowed to proceed, subject to some quite important modifications. The promoters, I am glad to say, 328 accepted the changes we considered necessary and we modified the Scheme accordingly. Since the Scheme relates to the United Kingdom, it was then laid before the Northern Ireland Parliament. Having been recently approved by that Parliament, it is now submitted for the approval of this House.
Before turning to the Scheme itself, I should like to say a few words about the background against which the Scheme should be seen. Egg production in this country has developed rapidly during recent years, and we are now producing nearly 95 per cent. of the eggs we eat compared with about 70 per cent. before the war. Poultry keepers all over the country are now producing over 10,000 million eggs a year. It sounds a great many but I believe that that figure is correct.
The bulk of this colossal number has to be marketed and, of course, marketed regularly and efficiently. Some are sold direct to consumers, but by far the greater number has to be collected and taken wherever the consumers need them. That means a steady flow of eggs from the country to the town, in the process of which packing stations have an important part to play.
For years brisk argument has centred round the best way of doing this, and strong and sometimes conflicting views have been passionately held. I think that the right hon. Gentleman the Member for Don Valley (Mr. T. Williams) will agree with me there. I saw just now my right hon. Friend the Member for Kelvingrove (Mr. Elliot) in his seat, and I know that the House remembers the part he played before the war in the development of agricultural marketing. The right hon. Member for Don Valley has also a wide knowledge of this subject.
There is no doubt that everyone, whatever conflicting views have been held, has been aiming at the same goal, which is to make sure that consumers, no matter where they live, shall be able to get eggs as fresh as it is humanly possible to provide them and at reasonable prices. The first thing to be done, I think it will be agreed, is to make sure that the eggs are sound and fresh when they are sent off, and the second thing, when handling large quantities of eggs, is to ensure that they shall be graded and packed so that wholesalers and retailers can order for 329 their customers the size and quantity of eggs they want.
It may be argued that that is the kind of thing that traders are well-equipped to do by themselves without any other assistance. There is, however, one troublesome factor in this business, which many producers and traders with long experience of the egg market feel that it would be difficult to meet without some kind of central organisation. That factor is the fluctuating nature of both the supply of eggs and the demand for them.
Hens, like Ministers, do not lay the same number of eggs each week; but, once hens have come into lay, one cannot turn the supply off and on again or regulate it week by week to suit the needs of the market. Housewives wishes also vary, and not always, unfortunately, in line with the changes in supply. Those two fluctuating factors, supply and demand, have to be reconciled and in this case reconciled quickly enough to enable eggs to be sold fresh. As a result of these factors, the egg market is a very sensitive one.
Changes in supply and demand do not have to be very large before biggish changes occur in the price, which may have a disrupting effect and leave room for harmful speculation, with all that that entails. Today, the industry is justly proud of the reputation that British eggs have come to earn among the public. In the marketing of eggs our main concern should be to try so to arrange things as to minimise the risks of eggs being delayed in transit from producer to consumer and losing quality on the way.
It is always difficult to make arrangements to suit everyone in all possible circumstances, but in a fluctuating, sensitive market like that of eggs I am satisfied that there is scope for some central organisation which can foresee the changes in supply and demand and help, as far as possible, to even out the flow. That is not to say that I want everybody organised into one inflexible system; and when they look at the Scheme I hope that hon. Members will feel that the modifications which we have made provide the degree of flexibility at which we ought to aim.
I now want to turn to the Scheme as it has been modified. The object is to ensure workable arrangements which will 330 be as widely acceptable as possible. Like the Commissioner, we felt that the Scheme as originally submitted was a little too restrictive, especially as regards sales to consumers and to retail shops. We therefore made a number of modifications, which we believe have gone a long way towards meeting the great weight of the main objections.
The first feature of the Scheme that I should mention is that it provides for a board with full trading powers. The board will have power to require that by far the great majority of eggs produced for the wholesale market will be sold by producers only to the board. In practice, it will employ packing stations as its agents to collect eggs from producers and to grade, test and stamp them. In general, eggs will continue to be distributed very much as they are today, but the board will be able to ensure the maintenance of quality standards, which are quite essential for the operation of a satisfactory wholesale market.
Every day the board will fix its selling price for eggs, and the distributive trades will be able to purchase those eggs from it at the prices settled. Any unsold eggs will be retained by the board and will be either moved to other markets or stored, for sale later. Some of the eggs which are surplus to immediate requirements may even be broken out by the board and sold, for instance, to baking establishments but, as with milk, the return from the manufacturing market is likely to be a good deal lower than for eggs sold in shell. There will be an incentive to the board to sell as many eggs as it possibly can in the fresh market. It will have no control over wholesale or retail distribution, so the normal competitive market forces will continue to be the dominating factor in selling eggs.
As I have said, the demand for eggs is a highly sensitive one, and consumers have shown quite clearly during the past year or two that they will not pay prices which they regard as too high. I am glad to say that at present the prices of eggs are extremely reasonable, and I do not think that the consumers have any view to the contrary. Under the conditions which I have described the views of consumers will be reflected back rapidly, and the board will have to pay scrupulous 331 attention to them in its trading activities —and I am sure that it will readily do so.
I referred earlier to working out the guarantee arrangements which would operate satisfactorily under those conditions, and our intention is that the guarantee arrangements shall be operated by the board. These arrangements will not be part of the Scheme which we are introducing this evening. But if, as I hope, the Scheme goes through Parliament, and is finally adopted by the producers, the Government propose that the guarantee under the Agriculture Act shall be a guarantee to the board, and not to individual producers, in the same way as it is at present in the case of milk and wool.
The general form of the guarantee, however, will be different from what it is at present. Under this Scheme it will be a flat-rate subsidy for all eggs of first quality passing through the packing stations. The rate of the fiat-rate subsidy will be fixed at each Annual Price Review. The prices paid to the producers will be a matter for the board to decide, subject to the provisions of the financial agreement with the Government to which I have referred. But under that financial agreement there will also be a profit and loss sharing arrangement between the Government and the board which will provide an incentive to maximum efficiency on the part of the board.
This profit and loss arrangement will work on these lines: at each Review an estimate will be made of the average market price likely to be realised for the sale of first quality eggs during the following year. If, in the event, the actual average price realised varies within 2d. per dozen above or below the estimated figure, the board will bear the loss or retain the profit. If the realised figure is more than 2d. below the estimate, the Exchequer will make up nine-tenths of the excess deficiency. On the other hand, if the realised figure is over 2d. above the estimate, the Exchequer will receive back half of the excess. The guarantee arrangements for duck eggs will be on similar lines, though not necessarily precisely the same, as for hen eggs.
This is the framework for the operation of the guarantee by the board which was agreed in principle by the Government 332 with the farmers' representatives, if such a Scheme were to be approved. When the detailed arrangements have been worked out they will be included in the financial agreement to which I have referred. I would like to say, in parenthesis, that it is the intention of the Government that producers with 50 birds or fewer will continue to get the guarantee, if they send their eggs through the packing stations.
There are one or two other important features of the Scheme to which I ought to refer. As recommended by the Commissioner, we modified the Scheme so that, by and large, it would apply only to eggs sold on a commercial scale. The qualification for exemption from registration was raised from 25 birds or fewer over six months old to 50 birds or fewer. This leaves outside the Scheme most of the backyard and domestic poultry keepers who are more concerned with supplying their own and neighbours' households with eggs.
The sales of eggs for export and for hatching will also be outside the board's marketing control. The board will also be able to exempt other types of producers, for instance, producers who live in really remote and outlying districts whose main interest will be purely in supplying the market needs of their own locality.
The provisions relating to direct sales and to retail shops constituted what might be called the storm centre of the inquiry. as I think the House will recollect. It has been very much in our minds throughout that we must see that distribution should be as quick and as free from obstacles and bottlenecks as we can possibly make it. The Commissioner devoted a lot of attention to these provisions and we accepted most of the changes he recommended, but we have gone rather further than those changes in one or two respects.
All producers who want to sell eggs direct to consumers will be able to get so-called "A" licences which allow producers to sell direct to consumers, and in that case they will not have to grade, test or stamp the eggs. I hope that the "A" licences will not be confused with the transport A licences. We ought to have called them X licences, or perhaps something else. For these eggs, that is, direct sales to consumers, there will be 333 the most speedy and the most direct transaction of all. These sales are bound to depend on the good will and the reputation that has been built up by a producer, and it seems to us desirable that that direct link between producer and consumer should be preserved.
Producers who want to sell direct to retail shops—not to the consumer, but to retail shops—will be able to get a so-called "B" licence. Here we have gone somewhat further than the Commissioner did. The Commissioner recommended simply that the board should have power to exempt such sales if it wished to do so, subject to such conditions as it cared 10 impose, but we felt that a rather more positive provision than that was desirable. If there Is a demand for eggs sold in this way then we think that such sales should be allowed to take place.
We therefore modified the Scheme to entitle a producer, as of right, to a licence to sell his eggs direct to the retail shops, provided he adheres to the conditions attached. No condition is to be attached in such cases that the producer must rest or grade those eggs before sale, but he may under the modified Scheme be required to mark them so as to identify them as his eggs—that is to say, the eggs of a particular producer.
Such an identity mark, we think, is likely to be necessary for proper control, because there will be no direct link between the producer and the consumer, as there would be if he sold his eggs direct to the consumer. We also think that this identification mark will help consumers by showing that these eggs have come direct from the farm and by making it possible to identify any producers whose eggs are regarded by the consumer as not up to standard.
I know that some producers would also like to be free to sell their eggs either to other producers or direct to the wholesalers. But I believe that to safeguard the reputation and the market of British eggs, eggs for the wholesale market ought to be properly graded and tested to a uniform standard and also marked to show the size and quality. Alternatively, they must be sold in such a way as I have described so that the identity of producers can be readily established. That consideration, I think, rules out the possibility of producers being permitted to 334 sell ungraded and untested eggs to other producers or to wholesale traders.
The administrative provisions and the miscellaneous powers of the board follow, in general, the usual pattern of marketing schemes, and I do not think I need go into diem in detail, but if there are any questions my hon. Friend the Joint Parliamentary Secretary will be glad to answer them. We have accepted the Commissioner's recommendations and also made a number of changes to ensure that the voice of minorities should be heard. For example, in the Scheme as originally submitted, it was provided that the minimum number of registered producers who could nominate a candidate for election to the board should be fixed at 50, but we have reduced this to 10. We think that this makes it rather easier for scattered groups of producers who might wish to put alternative candidates before their fellow producers for election.
As well as the detailed criticisms which arose at the inquiry, there are also objections to the Scheme in principle. Some people feel that it is wrong that producers should be given statutory powers such as are proposed for the board or they fear that the board might use such powers to hold other sections of the community to ransom. Such objectors tend to overlook two rather important factors. First, Parliament has given agricultural producers the right to promote this particular form of cooperative enterprise, designed to enable producers to help themselves to become more efficient producers and to help them towards more efficient marketing for their produce. Secondly, the Acts specifically recognise the possibility of conflicts between sectional interests over the operation of a scheme and provide a number of checks and balances to safeguard the interests which are likely to be affected.
There are safeguards for consumers, for trade interests, for producers and for the public interest generally. Some of these safeguards are in the Agricultural Marketing Acts themselves, such as the provision of powers for the Minister to intervene in the public interest and the procedure for dealing with complaints from consumers and others about the operation of schemes. There are other safeguards provided not in the Acts but in the Scheme. For instance, there is 335 provision for joint consultation with the trade over policy issues and provision for an arbitration procedure for aggrieved producers.
In conclusion, I would say this. This Scheme represents, I believe, another important step forward in our task of creating permanent marketing arrangements for agricultural products. I also believe that it represents another landmark in agricultural co-operation. The promotion of the Scheme shows very clearly that egg producers are alert and keen to help themselves to raise their standards of efficiency still further.
There is no doubt that the industry, as a whole, is making very steady and satisfactory progress in increasing productivity and improving efficiency. The Government have always been in favour of producer marketing boards in every appropriate case. Whenever we find a case where this type of organisation will, in our opinion, benefit producers and consumers, we are very glad to recommend to Parliament a scheme which has been promoted by producers. I believe that that is also, broadly, the view of the right hon. Member for Don Valley.
We have to look at each case on its merits. Recently, for pigs, we decided that the balance of advantage lay against a statutory marketing scheme, but I believe that this Egg Marketing Scheme is one that we can recommend as being in the public interest. Many hon. Members will remember the egg marketing situation between the wars. Here, we have a Scheme which the promoters have worked out with very great care. and, I believe, with a great sense of responsibility. The Government have considered it in all its aspects, and are satisfied that it should lead to further progress in the efficiency both of production and of marketing. We are satisfied, also, that it maintains a fair balance between all the interests concerned, and that the safeguards in the Scheme and in the Acts together are adequate.
The Scheme, of course, is not unalterable, and if, from experience in working it, it is found that improvements are required, amendments can be promoted and will, of course, be considered. If, as I hope, it is approved by Parliament, the industry itself will have the 336 final say at the initial poll. I am confident that if and when the Scheme comes into operation the board will be able to do a great deal for this important section of agriculture, and for those, consumers and others, who depend upon it for their supplies of fresh eggs. Therefore, I have every confidence in commending it for the approval of the House.
§ 9.3 p.m.
§ Mr. Thomas Williams (Don Valley)
I should, perhaps, make it clear at once that I have been a supporter of collective marketing schemes for quite a long time, and I make no apology for it. As far back as the mid-twenties I was a member of my party's agricultural advisory committee. If we knew little about the practical day-to-day operations on the farm, we all realised the hopelessness of 150,000 to 300,000 unorganised sellers facing a comparatively few organised buyers. We knew just what their chances were. As the Minister has said, quite a tiny surplus could completely knock out the bottom of any market.
In such circumstances, all the bargaining advantage goes to the middleman. The producers get a raw deal, and the consumer gets no benefit at all. Beef has recently provided a classic example of that. Another consequence of such a situation is that, when the price of any commodity slumps badly it is fairly obvious that production of that commodity will decrease in the following year. There was then no such thing, of course, as stability or efficiency. It was a case of hit or miss. This was all in favour of foreign exporters who were concentrating on the United Kingdom market. Co-operative marketing schemes were being built up abroad. Eggs—to mention one commodity in particular—were carefully tested, graded and packed, leaving the producer to devote the whole of his time to efficiency and quality production. No wonder, therefore, that they captured between 30 per cent. and 40 per cent. of our market.
Realising all this, my party came down on the side of collective marketing schemes, and it might interest the right hon. Gentleman the Minister of Agriculture, who was not in the House at that time, and many other hon. Members who were not here at that time, 337 that we printed the heads of our agricultural policy as early as January, 1929, and I need quote only one line—The development of collective marketing schemes.That was in January, 1929. In 1931 the second minority Labour Government passed the first Agricultural Marketing Act, and in the face of very keen opposition from every hon. Member on the benches opposite. The present Prime Minister, the Lord Privy Seal, the Chancellor of the Exchequer, the Minister of Health and the right hon. Member for Woodford (Sir W. Churchill) were all in the Division Lobby against marketing schemes and against that marketing Bill.
I suppose if the present Minister of Agriculture, a very loyal member of his party, had been here at that time he too would have opposed the Bill. It is true that since then we have taught them very many lessons, and we welcome their steady progress. Indeed, we watch their educational development with almost paternal pride.
In 1949 we amended the 1931 Act in the light of past experience, and we provided additional safeguards for consumers and traders against the abuse of any powers conceded to them—I ought to say powers which must be given if any scheme is going to have any chance of success.
I would commend to hon. Members Sections 1, 2 and 4 of the 1949 Act, and particularly to those who talk so glibly about monopoly, price fixing, the denial of housewives' choice and so forth Especially would I call their attention to Section 4 which, as the Minister says, gives him or any other Minister power to give a direction to the board with which the board must comply. In other word, if the board even intends to do a thing which the Minister of Agriculture thinks would be inimical to the interests of consumers or traders, the Minister of Agriculture has the power to impose a stop.
It will cause no surprise if I say that I am going to support this Scheme, believing as I do that it will be in the best interests of the producer and consumer, and indeed of the nation, by creating and maintaining a sense of stability, encouraging greater efficiency and providing a quality product that the housewife requires.
338 There are, of course, others who take an opposite point of view—some at least just as sincere, and some much less sincere. I happen to have read the Commissioner's Report from end to end, including all the arguments and objections which were submitted. These objections came from all sorts of individuals, leagues, associations and federations, interested and disinterested, but when the total number of objectors is compared with the total number of egg producers they are indeed exceedingly small. A figure of 1,200 objectors has been mentioned, but the number of egg producers ranges between 700,000 and 1 million, so that they are very small indeed by comparison.
§ Mr. Coldrick (Bristol, North-East)
My right hon. Friend says that, of course. people who objected had some special interest. Is he really suggesting that the promoters of this Scheme had no self-interest?
§ Mr. Williams
Most decidedly, they were definitely interested in it. The objectors who do not produce any eggs are not entitled to the same interest as the man who produces them. [HON. MEMBERS: "Oh."] In any case, what I said was that there were objectors, some of whom were interested and some of whom were disinterested. Surely, hon. Members would accept that. There is no condemnation there of any trade, or body, league, association, or what-you-will.
Some of the objectors are very interesting, if utterly unrepresentative. There is the British Housewives' League, the Hampstead Housewives' Association, the Birmingham Housewives' League, the Cheap Food League, the Society for Individual Freedom, the Land-Value Taxation League, the Proportional Representation Society, and, of course, a large number of representative associations and federations.
The Housewives' League was very active when we were in office, since when there has been a five-years' hibernation. Now it has emerged as a wholehearted opponent of this marketing Scheme, which it describes as a monopoly and conspiracy.
The Cheap Food League—all three of them—appeared as an objector, and two of them gave evidence at the inquiry. I 339 notice that both these gentlemen came from London, one from S.W.9 and one from S.W.11—obviously not food producers. They stand for cheap food produced by others.
The Land-Value Taxation League and the Proportional Representation Society seemed to me to be far removed from agricultural marketing schemes, but their presence at the inquiry may have had a propaganda effect for their particular organisations.
What is most important about these objectors is the comment of the Commissioner in page 86, paragraph 158 (3), of his Report, where he says:The Poultry Association of Great Britain is the only objector which has proposed any alternative to the Scheme other than what the promoters describe as the return to laissez-faire."That means, of course, that all the objectors except one opposed any marketing Scheme and prefer to go back to what the Commissioner described as the "bad old days". In page 22, paragraph 45 (1), the Commissioner said:The safest authority is that on which so many objectors rely, namely the Lucas Report, which speaks of the disparity in the bargaining power of the many and scattered units of primary production as against the relatively few well organised distributors and processers with their concentrations of buying power. Further, the Lucas Committee rejected a return to the policy of laissez-faire."After reviewing all the evidence, the Commissioner summarised the promoters' case in this way, in page 16 of his Report:At the present day the home-produced egg is marketed in the way in which the great mass of consumers want it. It commands a premium, and the imported egg is beaten. A return to pre-war conditions would be very detrimental…to producers, who would be exposed to inadequate market information, infrequent or no collection, gambling on a rising market by traders, low prices to producerswhen there is an abundance, anddiminishing consumer preference for home eggs".I agree with him there. They then make it clear that a voluntary scheme would failbecause there will always be somebody who will pay the producer more on a rising market thus depriving the packing station of suppliesperiodically; whileOn a falling market the packing station will he given the lot.340 Whatever the objectors may say, it seems obvious that a return to a "free-for-all" would mean complete chaos, particularly new when producers are supplying anything between 90 and 95 per cent. of the home market and output is still increasing. That, of course, is what some traders want. I do not put it higher than that.
The Commissioner was in no doubt about those dangers, as he made clear in paragraph 40, in which he said:The conclusion at which I have arrived is that I cannot disregard the promoters' evidence that there is danger of the packing station system, if I may use a comprehensive term, breaking down in a completely free market. If it does break down there could be rapid disintegration and great danger to the producer by a flood of imports on the home market.He concludes by sayingIt is an unjustified risk.If that is the right conclusion for the Commissioner to reach, is this the fairest scheme that can be devised to achieve the object in mind? Are the safeguards for the consumer and for the trader adequate?
A good deal has been said and written about compulsion, disciplinary powers, monopoly, lack of competition and denial of housewives' choice. On the first point, in the Commissioner's words,Short of the complete prohibition of sales other than through packing stations, the Scheme is probably as good a piece of machinery as the ingenuity of man can devise to force the maximum number of eggs into the packing station.I have already mentioned the safeguards in the 1949 Act, and I emphasise that they are very real. The Minister has already outlined the amendments to the original Scheme. It seems clear enough to me, at all events, that consumers will have ample choice of British eggs; retailers will be able to sell eggs tested. graded and stamped by a packing station and will also be able to sell untested, ungraded eggs direct from the producer; consumers will be able to buy direct from farms or producer-retailers if they prefer, and they will also be able to buy from the market stalls and off delivery vans, while again, as the right hon. Gentleman has said, producers with 50 hens or less will be exempt and free to sell eggs just as they wish. There will be no lack of competition, therefore, for housewives' choice.
§ Mr. Arthur Holt (Bolton, West)
If these are the benefits that the consumer will derive, will the right hon. Gentleman tell the House what consumers at the inquiry indicated their support of the Scheme?
§ Mr. Williams
The hon. Member asks me a question that he himself cannot answer. He can only tell me that the highest computation that was made was that there were 1,200 objectors. There are 50 million consumers. I cannot argue that all except the 1,200 are supporters of the Scheme any more than the hon. Member can argue that they are all against it. We have to accept the figures as they are, and the hon. Member will answer his own question to his own satisfaction.
Rather than there being no competition, denial of housewives' choice or a monopoly, I feel that both the Commissioner and the right hon. Gentleman may have opened the gate slightly too wide, so much so that they may conceivably have endangered the success of the Scheme. In any case, it is clear to me that there is no such thing as a monopoly. As to compulsion and disciplinary powers, every hon. Member must know that without such powers no scheme would have any chance of success. Not even the Milk Scheme could have succeeded without appropriate powers. Therefore, I am firmly convinced that the vast majority both of producers and consumers, if they understood the true position, would be ready and willing to support the scheme.
As the Commissioner said in paragraph 30,It is a surprising, but on reflection an accurate, statement…that 'as a result of the controls and the orderliness that was imparted to the egg maketing of this country during the war (there has been and remains) an enormous benefit to producers and consumers.'Those were the words of the Commissioner himself. With those controls and that orderliness removed the alternative is either a marketing scheme on these lines or a free for all and, perhaps, pre-war chaos.
The reintroduction of the Poultry Industry Bill of 1938 and 1939, which some objectors seem to prefer, is not before us tonight. Therefore, they are not alternatives to a marketing scheme. The only two alternatives facing the House 342 at the moment are, therefore, either a marketing scheme or nothing. Speaking for many of my hon. Friends I have no hesitation at all in coming down on the side of the marketing scheme.
§ 9.21 p.m.
§ Captain J. A. L. Duncan (South Angus)
I should like to congratulate the Minister on his explanation of the Scheme, and I have no quarrel with anything the right hon. Gentleman the Member for Don Valley (Mr. T. Williams) has said. but I think we ought to get these marketing schemes into the right perspective. The party of the right hon Member for Don Valley, in 1931, promoted what is technically called the principal Act. This side of the House, in 1933, promoted two Acts concerning agricultural marketing. The right hon. Gentleman himself, in 1949, produced the 1949 Act. Therefore, both sides of the House are committed to the principle of agricultural marketing schemes, and I think that we ought to be quite clear that this is settled bi-partisan policy for agriculture in all suitable cases.
How do these schemes work out? Personally, I have never been entirely happy about the set-up under the 1931 Act. Under that Act the Minister has to be satisfied that when a scheme is put forward by a body of producers they substantially represent the producers of the country. That is provided for in the First Schedule to the Scheme. I think in this case that condition is amply satisfied. The National Farmers' Unions of England, Scotland, and Northern Ireland have produced the Scheme. Then, under the 1931 Act, if objection is made a competent and impartial person has to inquire into it. I think that that condition has been fulfilled, because Mr. Baker did, I think, fulfil the duties of inquirer into this Scheme with great skill and competence.
Then the Minister can modify the Scheme, and he has done so in the way he has explained, and submit it to Parliament, but under the 1931 Act he can do so on beingsatisfied that the scheme will conduce to the more efficient production and marketing of the…product.It has nothing to do with the public interest or the consumers. I think that my right hon. Friend, in his speech tonight, has shown that he has fully considered that aspect of the matter.
343 Then comes the snag. Parliament discusses it and approves it, as we have done on previous occasions and, no doubt, will tonight. The snag comes in that, Parliament having committed itself to approval of the Scheme, the producers can still throw it out. I have never liked that aspect of the thing. My right hon. Friend has committed himself wholeheartedly tonight to the Scheme, and so has the right hon. Gentleman the Member for Don Valley, yet the producers outside can throw it out.
To have the Scheme adopted by the registered producers no fewer than two-thirds of the registered producers voting must vote for it, and they must be the registered producers who can produce not less than two-thirds of the eggs. That is a very big hurdle. Therefore, my right hon. Friend has "chanced his arm" a little tonight in coming out so full-bloodedly for the Scheme when the producers may yet throw it out. The right hon. Member for Don Valley is in the same position, and we have no alternative but to do the same ourselves. We must back this Scheme because we are committed in all suitable cases, and we must hope that it will satisfy the producer.
I come now to the Agricultural Marketing Act, 1949, and to deal with the safeguards under the Acts and the Scheme which the Minister has mentioned. The Minister is to provide a list of producers. Can he produce such a list? How will he get the registered voters unless he can produce it? Secondly, it is provided that the Minister shall appoint under the Agricultural Marketing Act, 1931, consumers committees which are one of the safeguards in the Act, and a committee of investigation. As the Act is apparently mandatory, I should like to ask the Minister when these committees will be set up.
Then one of the conditions under the 1933 Act is that the Minister has the power in Section 1 to regulate imports. I would like to ask him not whether he will do that, because that lies in the future, but what power the Minister has under recent legislation and under G.A.T.T., for instance, to regulate the importation of eggs and to what extent Section 1 of the 1933 Act is, in fact, applicable to importation. There may come a time, as we are now producing over 90 per cent. of home needs, when it might be necessary to give 344 some protection against imported eggs, otherwise the Scheme might fail. The right hon. Member for Don Valley joked about certain Ministers opposing the Government in 1931, but the root objection in 1931, under the Labour Government's Act, was that there was no protection, and a marketing scheme without protection, in those days at any rate, might well have failed.
As to safeguards, the Minister appoints at least two and not more than one-fifth of the membership of the board to represent consumers of eggs, not traders. That is a very efficient safeguard. Under Section 2, the Minister can issue Orders if the board does anything by way of restriction of quantity or of price which he regards as not being in the public interest. This is the first time, under the 1949 Act, that public interest comes into the picture, and this is far wider than efficient production and marketing of the product. "Public interest" which nobody has ever defined is a very wide safeguard to the consumer.
Then, under Section 4, the Minister may issue a temporary order to prevent injury to the public interest. Such an order could be issued upon the complaint of anybody—the trader, the wholesaler, or anyone. That safeguard, too, is an extremely valuable one. Lastly, under paragraph 37 of the Scheme, joint consultative committees are being set up.
Having explained the powers under the Acts and under the Scheme, I am not sure that it is really necessary tonight for us to explain the Scheme. What we have to be satisfied about is that the Scheme is in accordance with the Acts, and my right hon. Friend has amply shown that it is. If we wanted to go further and criticise a certain scheme, we should be criticising the Acts, and this is not the occasion for that. If someone wanted to do that, it should be done by a Motion or in some other way.
I believe that the Scheme is completely within the Acts of Parliament to which both sides of the House are pledged. I do not propose, consequently, to go into its details. I merely conclude with this remark. The Government have got out of State trading in eggs, and that is a good thing, but we cannot leave a void. The void is being filled by this Scheme, which is in accordance with Acts of Parliament to which both sides of the 345 House are committed, and, therefore, I consider that it should stand its chance in the poll of public opinion of the registered producers.
§ 9.32 p.m.
§ Mr. Coldrick (Bristol, North-East)
I oppose the Scheme. I admired the sedulous way in which the Minister sought to find reasons to justify a policy which certainly has the commendation of the producers but has very little support from the consumers.
I was astonished to hear the hon. and gallant Member for South Angus (Captain Duncan) suggest that he would be prepared to go so far as to urge people, at the behest of the House, to join a certain association and thereby use compulsory powers in relation to the Scheme which we should not dream of employing elsewhere.
In order to be clear about the Scheme, what we, as hon. Members, have to realise is that the Minister proposes to set up a board of twenty-one people, seventeen of whom will be chosen exclusively by the producers, and four by the Minister to represent consumers and others. It is fairly obvious that the seventeen will have other business to do, and that it cannot be a full-time board devoting itself entirely to the question of marketing. The result is that the Scheme makes provision for the establishment of an executive, which will be composed of seven persons, including one representative chosen by the Minister. We are now confronted with the situation that we have seven people, six chosen by the producers, given virtually totalitarian powers in regulations dealing with the marketing of eggs in this country. I am given to understand that the seven will control the marketing of eggs to the extent of about £100 million turnover within this country. Does any hon. Member suggest that those people are sufficiently competent to be entrusted with a task of that character?
We should recognise the powers which will be conferred on it once the board is formally established with its executive. It has the power to regulate the supply of eggs to a substantial extent. It will proceed to regulate prices, because daily and weekly it will use the packing stations as an agent to prescribe the minimum charges which will be paid to 346 the producer. The packing stations will know, with the subsidy provided at the taxpayers' expense plus the possibility of the consumer being fleeced, that a certain price will be raised. The executive, acting on behalf of the board, will determine what the minimum price will be.
Having given the board the power to determine prices, we will give it the power to determine how many packing stations will operate. It has sufficient power within the Scheme—apparently it does not intend to exercise it at the moment—ultimately to be able to decide where the producer shall send the eggs, whether to one particular packing station or another. The board has the power to establish packing stations. What is to prevent it ultimately coming to an arrangement whereby it will dictate to the producer the particular packing station through which the eggs shall be passed to be tested and graded and so forth?
Having been given these powers, the board will have the right to issue licences. There will be two forms of licence, licence A and licence B. Under licence A it will be possible for the producer to sell directly to the consumer, provided that he is prepared to be registered and to conform to the conditions laid down by the board. Hon. Members should not be hoodwinked by the statements which have been made. Anybody with an ounce of experience knows perfectly well that it will be possible for the board to prescribe for the producer such conditions as to make it almost impossible for the producer to continue in business, unless he exactly conforms to the behest of the board.
I am amazed at the attitude of hon. Members opposite, who are always concerned about Government regulations, about snoopers and people of that type, giving this board the Dower to determine that any producer shall keep his accounts in a manner prescribed by the board. He will have to send returns to the board in the approved fashion. I can well imagine that the ordinary producer, who is more concerned with producing eggs than with producing red tape, will curse the authors of this measure as much as hon. Members opposite have cursed the people who were responsible for State regulations and things of that nature.
347 It seems that the hon. and gallant Member for South Angus is in favour of control so long as it is not State control. He is in favour of control so long as it is entrusted to a limited body of people, but he is not prepared to entrust those powers to Parliament to exercise them on behalf of people generally.
The same sort of thing happens to people licensed under licence B. They can sell to grocers and retailers and people of that nature, but the board will not trust them implicitly. In order that the board will be able to have some control over them, the board will insist that they put a stamp on the eggs to identify a person who happens to supply bad eggs. The Minister himself used a very bad analogy. He said that a Minister was like hens—he did not lay a good egg every week. It would be safe to estimate that a hen never lays a bad egg, while it is true that the Minister very often lays a bad Bill, even if he does not lay a bad egg.
I am not speaking officially on behalf of the Co-operative Movement, but my right hon. Friend, of course, made a great deal of play with the fact that there were only 700 or 1,000—whatever the figure was—objectors to this particular scheme. I happen to be a member of the Central Committee of the Cooperative Movement, which was responsible for registering a protest in the interests of 12 million consumers in this country. Believe me, that was not merely a decision of a committee. This matter went before one of the most democratic forms of assembly in this country. It was debated in the Co-operative Congress, and no matter what the Housewives' League, to which reference has been made, may think, we can rest assured that if the ordinary housewives of this country knew that this Scheme was being put forward at the behest of the producers, deliberately to benefit the producers, there would be far more objection to it than has been registered at the present moment.
Let me say in conclusion that I am not a bit interested in the pedigree of this Scheme. Hon. Members opposite may be proud that they introduced a Bill in 1931 and other people may be proud that we introduced another Bill in 1945 and another in 1949, but the plain fact 348 of the matter is that all these egg marketing schemes at the present moment are a monument to the influence and power of Sir James Turner. [HON. MEMBERS: "Oh."] Do not let us be under any illusion about that. I have been with hon. Members opposite to some of the egg packing stations, and I have a great admiration for their efficiency, but members of the Farmers' Union themselves tell one very candidly that Sir James makes a proud boast of the fact that it is his policy that will be carried out in this Parliament no matter who happens to be the Minister.
§ Mr. Frederick Peart (Workington)
Surely, my hon. Friend, with his connections with the Labour Movement, is aware of the fine work that Lord Addison did in starting schemes of this kind?
§ Mr. Coldrick
I am afraid that it is a long time since Lord Addison had anything to do with those schemes. Of course, the hon. Member should know perfectly well that to compare what happened between the wars with the conditions obtaining today is without relevance in any form whatsoever, because people are saying: "We do not want to go back to the chaos of marketing before the war." In the name of everything that is reasonable, do we want to go back to the conditions of unemployment among the miners, the engineers and everyone else that obtained during the inter-war period? So do not let us have any more of this argument about the conditions which obained then and which do not obtain now.
I say with great seriousness that I do not believe that one argument can be adduced in favour of compulsion being used to make the producers of eggs join an association which cannot be as validly adduced to compel every producer of coal to belong to a miners' union. [HON. MEMBERS: "They do."] If they do, it is because the miners have sufficient common sense to associate themselves with it. If any hon. Member opposite who guffaws about this matter or my right hon. Friend the Member for Don Valley (Mr. T. Williams) will stand up as an ex-miner—and I speak as an ex-miner myself—and instance one occasion upon which efforts have been made in this House to confer upon a miners' union the power to compel its members to join the association in the same way as the 349 farmers' union is asking us to give it statutory power to force other people to join that association, then I will readily give way.
§ Mr. T. Williams
If my hon. Friend does not know it, perhaps I had better tell him. Every mineworker in this country is a member of the National Union of Mineworkers.
§ Mr. Coldrick
That form of sophistry is not going to deceive anybody. We are virtually advocating that if two-thirds of the producers elect to enter a producers' association the organisers of that association shall receive statutory power from Parliament to compel the other one-third to join whether or not they want to.
I challenge the right hon. Gentleman once again. Never has any trade union striven to use its influence to obtain statutory power to compel the whole of its membership to join its own association. There is not a single argument which can be used in favour of the producers of eggs which could not be used in favour of the producers of other commodities, unless we are to assume that the producers of eggs are much more important than the other producers.
This is the platform from which we have to make statements on behalf of the general mass of the people, and not merely in the interests of the few. I want to make it abundantly clear that I am in favour of orderly marketing. I believe that eggs should be graded, tested, and classified, but I strongly object to a producers' board being entrusted with monopoly powers. Consequently, I see no reason at all, even in the marketing of eggs, why the board should not be constituted in such a way as to ensure that producers, distributors, and consumers are all represented on it.
If a body were constituted in that way, adequately reflecting the vital factors concerning all those engaged in this important industry, I believe that it would command public confidence, but I bitterly oppose the fact that this House, so far from exercising its own rights, should give a small body of people the inordinate powers which will be conferred on it by the Scheme and, at the same time, give it power through a disciplinary board to levy fines of up to £100 upon members who are not prepared to comply with its behest. It is 350 a denial of liberty, and I am surprised that any hon. Member should be so forgetful of consumers in general that he is prepared to pander to the pressure of the people who have organised this Scheme.
§ 9.49 p.m.
§ Mr. John Baldock (Harborough)
The hon. Member for Bristol, North-East (Mr. Coldrick) has, like many other critics of the Scheme, suggested that the great majority of consumers would be opposed to it if they knew about it. I saw a great deal of jubilation among the ranks of the Liberals whilst his speech was being made, and I felt that at the time they really thought that their ranks were going to be increased; that a new recruit was joining them, and that the clock was being put back to the nineteenth century. Other than that, I think we all enjoyed the suggestion that the 12 million co-operators were all violently opposed to any producer marketing scheme. I cannot think that the great majority of them have considered this matter very carefully, and in the end the hon. Member for Bristol, North-East admitted that. He said that if they had done so, they would have been more violently opposed than they are. I cannot agree with hint in that respect either.
There is a great deal of understanding among the urban population today of the problems of agriculture and that is a fortunate thing. The urban population do not want to see the same state of affairs existing on the land and in regard to agriculture as was the case between the wars. They have every reason to feel that the present system of egg marketing is reasonably satisfactory. They are getting a good and plentiful supply of fresh eggs at a reasonable price. They want to see that continue and the agricultural producers given a square deal.
Even were this Scheme thoroughly explained to them, I cannot agree that resistance from them would be considerable. There is no evidence of that. It seems to me that this Scheme strikes a balance very nicely. The danger of monopoly is avoided, because there will be three channels through which home-produced eggs may reach the consumer. There will be the board operating through the packing stations, direct from 351 the farm gate; or the farmer with a retail round as widespread as he likes, or the farmer selling direct to the retailer. There is no question of prices being fixed by the board. The producer-retailer, or the producer who sells to a retailer, can charge any price he is able to obtain, and the normal law of supply and demand which exponents of the laissez-faire economy like so much will apply. I cannot see how it can be contended that that represents any kind of monoply; and, of course, there is always the competition from foreign eggs in the background if the price of the home-produced article gets out of line.
There is the danger, if this board is not set up—I am sure this will be appreciated by the producers when they come to the poll—that tens of thousands of small farmers will be in a weak position when they come to deal with the relatively small but powerful number of buyers, of which I suppose the Co-operative Movement is one of the strongest. I cannot see how these small farmers can hope to hold their own, any more than the milk producers did before the Milk Marketing Board was set up; and we would not wish to see a return to the state of affairs such as existed before the Milk Marketing Board was set up.
I like producer-marketing schemes. I consider they are applicable to most categories of agricultural products, however unpopular they may be with many economists and the "Cheap-Food-and-Blow-the-Consequences-League" which offered evidence before the inquiry. Nor am I ashamed to use the word "planning." Few enterprises or concerns are successful without the use of planning, and I take satisfaction from the fact that the Tories were the original planners in the political field. In the days—to which we seem to have returned this evening—of the nineteenth century, when we had a Liberal Party and a Conservative Party, it was the Conservatives who wished to introduce a measure of planning by imposing tariffs when the economists and the Liberal Party were pressing for a laissez-faire scheme of things.
I hope that the power of advertising will be used by this Board, because it should be brought home to the public more than it is at present that fresh eggs are very good food value indeed. Nothing 352 will increase the sales of eggs more than knowledge on the part of consumers that those offered for sale are really fresh. That is even more important than advertising. The board should use every power it has to avoid the hoarding of eggs when prices are rising and to prevent a minority of producers and traders, the black sheep of the industry, injuring the sales of the great majority by allowing eggs which are not absolutely fresh to get through to the customer, thus giving packing station eggs literally a bad name.
The levelling up of prices over the year would be a valuable development. I do not think that the housewife likes having to pay widely fluctuating prices from month to month during the course of the year. That tends to reduce the consumption of eggs because many people stop buying when they find that prices are high, and they may not discover for some time that prices have gone down again. There tends to be a time lag and a reduction in consumption.
If there were a greater levelling out of prices there would be less temptation to hold back supplies when prices were rising steeply and a greater inducement to consumers to buy. I hope that modern methods of poultry management, with artificial lighting and so on, will help to even out the seasonal prices to make them more level throughout the year.
Also from the producers' point of view, I think that the board should do something to even out prices between grades. At the moment the producer gets the worst of both worlds. If he produces large eggs he may give away a quarter of an ounce on each egg. If an egg is one quarter of an ounce over one and seven-eighth ounces, which is the boundary line between the standard and the small egg, if an egg is a quarter of an ounce over the top, which is a 12½ per cent. increase in food value, it still goes for the same price. On the other hand, which is even worse for him, if the size of the egg is only one-thirty-second of an ounce—which is an absolutely infinitesimal amount which could not possibly be detected by any consumer—below one and seven-eighth ounces, the price falls by nearly one-third.
Obviously that is an inequitable situation. I hope that other grades will be introduced so that the price may more evenly correspond with the food value 353 which the producer is selling. To have a jump of one-third in the price for one-thirty-second of an ounce difference in the egg does not seem in any way reasonable.
I believe that if this Scheme is accepted by the House and by the producers three valuable results will follow. The consumer should have a greater supply of home-produced eggs; the producer will have an expanding market with orderly selling and the advantages of advertising, of which he is deprived at present, and also greater freedom than he has now; and the Government will have a saving in foreign currency, because the very small labour content in the cost of production of eggs means that we should be able to compete with the producers of imported eggs even if they are from countries where the standard of living is considerably lower than our own, provided that we can buy feeding stuffs at competitive prices. I hope very much that the Scheme will be accepted.
§ 9.59 p.m.
§ Mr. Donald Wade (Huddersfield, West)
I want at the outset to say that I am wholeheartedly in favour of the improved marketing of agricultural products and better distribution. I also recognise that there have been important modifications in the original Scheme. Nevertheless, in considering this and any marketing scheme one should start with the general principle that voluntary cooperation is better than compulsory co-operation. The onus of proof is certainly on those who wish to put forward a scheme which involves compulsion upon producers to enter a scheme whether they wish to do so or not.
One must also consider the interests of the consumers as well as the interests of the producers. I emphasise that the consumer is an interested party as well as the producer. It is just as well to clear up the purpose of this Scheme. I understand that it is not intended primarily to plan production over a period of years in the light of needs which the Government or some other body estimates. I gather that the Minister is not attempting to put forward the Scheme on the ground that it is part of a national plan for the production of eggs. Indeed, I very much doubt whether eggs would be suitable for that 354 kind of system, whatever one's ideological views may be.
Perhaps I might remind the right hon. Gentleman of a reply which he gave to a question of mine about pigs on 17th November, 1955. I asked:Would the Minister agree that pigs have not proved very amenable to Government planning, and does he consider this the fault of the pigs or the planners?The Minister replied:I think that probably the fault is the principle of Government planning.—-[OFFICIAL REPORT, 17th November, 1955; Vol. 546, c. 765–6.]We are not considering the question either of Government planning or planning by a board, although I got the impression from the Minister that he appears to favour planning by a board as opposed to planning by the Government.
As I have said, we have to consider the interests of both the consumer and the producer, and in order not to be biassed I have considered the matter, first, from the producer's point of view. I do not claim to be in the business myself, nor do I claim to be a poultry farmer, but in days gone by I made a special hobby of keeping poultry. I kept 50 to 100 and I made it pay. Those were in the days when we got about 10d. a dozen for eggs.
In the light of that limited experience, I am very doubtful whether this Scheme will work. Furthermore, I foresee considerable difficulties arising, for example, in drawing the line between those who will come within the Scheme and those who will not. This does not affect very large producers, but it will be a matter of considerable concern to the small producers.
If we look at the Scheme we find in the definition paragraph, paragraph 43,A producer shall be exempt…if…he has in his possession in the United Kingdom not more than 50 head of live poultry over the age of six months or such larger number as may from time to time be prescribed.…As far as I can ascertain, "poultry" is not limited to hens in the strict sense of the word. As far as I have been able to ascertain, in the Scheme the female is deemed to embrace the male. If one is a small poultry farmer keeping 50 hens and one cockerel, one comes into the Scheme; but if one has only 50 hens, one is out of the Scheme.
355 My experience reminds me that during certain parts of the year one may have 30 poultry and during other parts of the year 80 poultry. What is to happen? I suppose that during a certain part of the year one will have to apply for a licence, otherwise there will be a danger of an inspector making a visit with the result that one may be liable to a fine of up to £100. One may be fattening cockerels over six months of age for Christmas. That is the kind of practical problem which the producer will have to face.
I can understand that it would be unfair were a poultry farmer entitled to go in and out of the Scheme from time to time during the year. It would be very difficult for the packing stations were that to be the case. Personally, I would see no objection to a provision whereby any one having entered this Scheme, would have to give, say, nine or twelve months' notice before leaving it again. In my view, that would not be contrary to the voluntary principle; on the assumption, of course, that it was a voluntary and not a compulsory Scheme. That would get over the difficulty of packing stations not being able to work on any satisfactory lines if producers were free to enter and leave the Scheme from time to time during the year.
I am not at all convinced that the Scheme will work for the benefit of the go-ahead producer. A producer might work out a new scheme for the marketing of eggs which might not be in keeping with the board's ideas. He might wish to develop, as some producers already have, date stamping, and may, by that means, have worked up a very successful clientele. As I understand, it is likely that the board would be opposed to such an idea. Individual poultry keepers, or groups of them, may in time develop new and better marketing schemes, and should be free to do so. I fear that this board may retard rather than encourage developments of that kind.
I have called paragraph 81 of the Scheme the "snooping clause," and paragraph 85 deals with penalties. I remember discussing the subject of snooping when we were dealing with the Restrictive Trade Practices Bill. The President of the Board of Trade then accepted the modfications that were put forward, and 356 abandoned the original proposals which would have given very wide powers of entry and so on. Here, we find the same kind of thing. Paraphrased, paragraph 81 provides that any person, on written authority from the board, may enter and inspect premises of a registered producer if he has reason to believe that the premises are being used to produce eggs. No magistrates' warrant would be required. In fact, the board would have wider powers than have the police and, as a Liberal, I cannot look on that with much favour.
Paragraph 85 provides that the disciplinary committee which is appointed by the board to enforce its own regulations can impose fines of up to £100 and, as the Minister knows, in certain circumstances, fines of up to £200 can be imposed. The general impression one gets is that the powers are very wide indeed, and a very great measure of responsibility is left with the board, from which there is no right of appeal.
§ Mr. Douglas Marshall (Bodmin)
I should like the hon. Member to clear up one point which is, I think, of some importance. Has he stated that the Liberal Party, as a whole, is against any producer board which is compulsory?
§ Mr. Wade
I do not think that I have stated that I am against any producer board in which there is an element of compulsion. I do say that, in examining any scheme, one should start from the general principle that a voluntary scheme is better than a compulsory one, and the onus should be on anyone putting forward a scheme to show that the advantage lies with compulsion. So far, I have not been convinced of the need for these very great compulsory powers. That is the point I am trying to make. I was referring to the penalties.
I am not sure whether there is any right of appeal at all. So far as I can see, there is no right of appeal to the court. There is provision under paragraph 97 for arbitration. That paragraph states:Any producer who is aggrieved by an act or omission of the Board may refer the matter to the arbitration of a single arbitrator…357 but it is not at all clear to me whether, if a producer has been fined, that is an act or omission of the board. Perhaps that point could be clarified. It does not alter the fact that very great powers have been given to the board.
Then there is the cost of the Scheme. It is difficult to estimate what the cost is to be. I notice from the evidence before the Commission that it was estimated that the amount that would be raised by way of levy would be in the nature of £1 million. That is a large sum of money, and, directly or indirectly, it would presumably have to be borne by the consumer.
I think it is fair to say that there are many who hold the view of one of those who wrote to the Commission, and I am reading letter No. 301, which concludes as follows:A lot of my friends who keep poultry think the same as I do about the proposed egg scheme.I want to be quite fair; that is the original scheme—We have had enough of restrictions and controls in the farming industry, and I would like to ask who is going to pay all the officials if we have a Board.That was written by Miss L. M. Litchfield, a farmer's daughter, and Chairman of the Young Conservatives, West Haddon.
I approach this matter from the point of view of the small producers as well as the consumers, but I think that there is a further point which I might reasonably make from the point of view of the consumers alone. There is no provision, that I can see, which will ensure that retailers will not keep eggs on their premises for an unduly long time. There is no guarantee of freshness from that aspect of the matter.
I am not casting a reflection on retailers, but if it is claimed that this Scheme will ensure fresh eggs for the consumer I should like to know where it is provided that the retailer will sell the eggs within a specified period of time and what guarantee there is for the consumer. It is claimed that that is the benefit that the Scheme will bring about.
Again, the representation of the consumer on the board is, I think, quite inadequate. It is true of so many boards, and, once again, we find the consumer representation inadequate.
358 Finally, I should like to know exactly what are the Minister's views on the subject of competition to which the Commissioner referred. He summed it up as follows:I am bound to say that, having reviewed all the evidence and thought over this matter long and cautiously, my conclusion is that the case in favour of competition is overwhelming.I could not make out from the speech of the Minister, when introducing the Scheme, whether he had come to the same conclusion so far as the production of eggs was concerned. Until I am satisfied on that point, I must remain extremely sceptical.
§ 10.14 p.m.
§ Mr. Archer Baldwin (Leominster)
I feel sure that my right hon. Friend the Minister of Agriculture will be disappointed if I do not make my usual protest against a compulsory marketing board. I have registered my protest on each board that has been proposed in the House, and I do so on this one.
I am glad that my right hon. Friend has modified to a large extent the original suggestions that were made, but still there is that element of compulsion to which I object. It seems rather extraordinary to me, as a Conservative, when I remember the attacks we made when we were on that side of the House against the Lucas Report, that we should now be bringing in or sponsoring a Scheme which gives just as wide powers of monopoly as the Lucas Marketing Report suggested. in fact, a year or two ago, when one of the leaders of the National Farmers' Union was advocating a marketing board, the noble Lord made the comment to me that this was "out-Lucasing Lucas".
My real objection to this board is that it is completely unnecessary. It will put another huge expense on to the producer and consumer. The hon. Gentleman the Member of Huddersfield, West (Mr. Wade) suggested a figure of £1 million, but I have heard it suggested that it would be £2 million. I do not regard it as necessary to bring in a Scheme which is not needed for the marketing of eggs.
Let me make it quite plain that I ant a believer in voluntary co-operatives. I am a member of a corn co-operative, a shareholder, and a strong supporter; but if people in the corn co-operative wanted 359 to bring forward a suggestion, such as some members of the National Farmers' Union advanced, that there should be a cereals marketing board, I should fight them to the last ditch.
At the present moment, I get the competition which I think I am entitled to, being able to go either to the co-operative marketing board or to the trade itself for my prices. That should always obtain; we should always have competition. I agree with the remark of the Commissioner in page 2 of his Report, when he says that in his opinion competition is absolutely necessary; but he did not follow it up afterwards.
My reason for saying this Scheme is unnecessary is this. There are today some 600 packing stations. I am not attacking packing stations at all. I have recently been over two, one in Hereford and one in Maidstone, which are doing a first-class job, supplying eggs which are clean, sending them away fresh from those centres. I cannot think that anything could be done better. Why, therefore, should we have a board on top of them to try and tell them how they can market their eggs? They are finding their own market from the packing stations, and they are in competition with one another.
What I visualise is this. If a marketing board is set up, competition will finish. All these voluntary packing stations at present operating will come under one control and the Scheme will be compulsory. Farmers should think very seriously before they vote for a Scheme of this sort.
§ Mr. Anthony Hurd (Newbury)
My hon. Friend will, no doubt, have read the Scheme, and he will, no doubt, have noted in its terms that the farmers' co-operative packing stations will continue as separate entities, competing one against the other, and the one which is most efficient will be able to pay the best price to the producer.
§ Mr. Baldwin
They are already joining together before the Scheme comes into being, and, in any case, when the Scheme comes into being pressure will 360 be brought to bear on them to come under one wing all together. Time will tell. That is my impression.
In my view, it is something which is completely unnecessary, which we ought not to support. We shall see them all swallowed up. The bogey which has been raised by the suggestion that if we do not have this marketing board we shall go back to pre-war chaos is no more than a bogey set up in an effort to frighten the producers into voting for this Scheme. If it were likely that we should go back to pre-war chaos, how is it that something like 200 packing stations before the war were running, and running well, in competition with the open market? There are now 600 packing stations, and they could still run, as did the pre-war packing stations, without any compulsory powers. The packing stations, with their improved standards and technique, are in a stronger position today to maintain themselves than were the pre-war stations. That is one reason why the board is completely unnecessary.
I know it has been said that because A and B licences will be issued to producers there is not the element of compulsion; but if a man is issued with a B licence, why should he be allowed to sell only to a retailer? Why should he not be able to sell to a wholesaler? if any producer of eggs can find his own market without claiming a deficiency payment or making any call on the Chancellor of the Exchequer or on the taxpayer, it would be all to the good to make the Scheme one in which producers who can sell their eggs should be entitled to do so without having any deficiency payments.
§ Mr. Baldwin
No, they will not. A B licence producer of eggs will not be entitled to sell his eggs where he wishes.
§ Mr. Baldwin
No, he will not. He cannot sell to a wholesaler. He can sell to a retailer, but possibly the terms laid down by the board will be such that he will not want to do so. That is the power that is being given to the board. I should like to see A and B licences cut out completely and producers who can find their own market permitted to do so without being compelled to obtain licences.
361 That is all I want to say in general against the Scheme. I am completely against compulsory schemes. A producer should be entitled to find his own market if he can, and the bogey about the wholesomeness or purity of the egg is simply humbug. If a producer finds his own customer and sells to him eggs which are not good, he will very soon lose that customer. A producer will take good care that when he finds a market with a customer he will keep the customer by selling to him eggs of good standard and quality. Therefore, it is wrong to suggest that if a man is allowed to find his own market he will dispose of bad eggs.
I hope that before they vote for the Scheme the farmers will read particularly those parts of it which give powers of prosecution. This means the setting up of snoopers and all the paraphernalia that we, as Conservatives, say we like to avoid —and we are getting it in the Scheme. I hope that farmers will realise this and will not vote for a Scheme which might in the end lead to the nationalisation of distribution, because that is the machinery that we are setting up in this and other marketing measures. Although the right hon. Member for Don Valley (Mr. T. Williams) advocated the introduction of the marketing scheme in 1929, he did not say that at that time also he advocated the nationalisation of land. For these reasons, I hope that farmers will think seriously before voting for the Scheme.
§ 10.24 p.m.
§ Mr. M. Philips Price (Gloucestershire, West)
The hon. Member for Leominster (Mr. Baldwin) is, of course, logical in his speech and represents those hon. Members on his side of the House who are against all forms of control by the State. The Conservative Party has progressed quite a lot in the last decade, but there are still some who are like the hon. Member.
The hon. Member, of course, is opposed to the whole thing. He would be opposed, no doubt, to the Agricultural Marketing Act. 1931, as his party was opposed to it. It is true that most of its members gave the reason that at that time there was no restriction of imports.
§ Mr. Philips Price
Quite rightly, that was one of the reasons. Another reason, however, was that a section of the party 362 opposite, of which the hon. Member for Leominster is a good example, was opposed to any form of organised planning or marketing.
The hon. Member for Huddersfield, West (Mr. Wade), speaking from the Liberals' bench, is in a rather different position. In 1931, when the Agricultural Marketing Act was only a Bill, I, along with my right hon. Friend the Member for Don Valley (Mr. T. Williams), sat on the Standing Committee which considered the Bill, and then the Liberals supported Lord Addison. The hon. Member for Huddersfield, West has run away from that position, whereas the hon. Member for Leominster has been quite logical.
§ Mr. Baldwin
I thought I made it quite clear that I am not against organised marketing. I am against compulsory marketing. I am all in favour of the packing stations being run as they are at present.
§ Mr. Philips Price
I should like to know how we are to have organised marketing unless there is compulsory marketing in the sense that the majority of the producers are protected from the wrecking of the scheme by the minority. That was the whole point of the 1931 Act. So I hope that this Marketing Scheme will go through.
Farmers used to be criticised because they did not organise the marketing of their produce. I remember so well those days when the farmers of Denmark and Holland were pointed to as examples for British farmers to follow, because the Danish and the Dutch farmers organised the marketing and sale of their products. They sent their products over here, and got the best prices, because our farmers' products were not marketed in the same way. That the Danes and the Dutch were examples to our farmers was the view then of all progressive people, including Liberals in those days. The Liberals have fallen from grace. My word they have.
§ Mr. Philips Price
During the last twenty-five years the British farmers have pulled themselves together and have organised the sale of their produce in a way in which it had not been done before. The difficulty all the time, of course, with voluntary marketing schemes 363 has been that there is a minority who will not, for one reason or another, come in, and so they make it impossible to run organised marketing schemes.
Hence the Act of 1931, out of which we have had a number of very successful schemes. The most successful of all is the Milk Marketing Scheme. I do not think that anybody would wish now to go back to the chaotic conditions that prevailed before that Scheme was instituted, when everybody could do as he liked. Now, under that great marketing board we have every conceivable form of development in the industry. There is publicity for it there are schemes such as those for the improvement of livestock, financed out of the profits of the Scheme. Then we had the schemes for potato, hops and wool.
Now a Scheme is brought along for eggs, and at once we hear criticism, not that the British farmer is not organising himself but that he is organising himself. Loud are the complaints now of those who were once criticising the British farmers for not being like the Danes and the Dutch, and those critics complain that the British farmers are monopolistic, and are exploiting the consumers and interfering with the rights of the individual.
What are the facts? Before the war the egg industry was not properly organised, and foreign eggs which were imported were well graded and marked and were superior to ours and commanded a better price. During the war the Ministry of Food came into the market, took over the control of the purchase and the sale of eggs, and the packing stations, which had been begun before the war, were developed still further during the war, and they were worked in conjunction with the Ministry of Food.
Now packing stations. both private and producer-co-operative, cover a very large proportion of the eggs produced in the country. They have been very successful. We have one in Cheltenham which covers a large part of the egg production in Gloucestershire. The result of all this has been that as long as the Government were trading in eggs we had assured markets, and with the packing stations operating we had properly graded and marked eggs. That condition will end now with the ending of Government trad- 364 ing, and if we do not have something in its place we shall have chaos once more.
As a result of what has happened in the last fifteen or twenty years, imports have fallen from 40 per cent. to 10 per cent. of our total egg production, and we now have first-class quality eggs, whereas formerly we did not and the'. foreigners had the best. The position surely is that unless we have a scheme of this kind we shall not be able to organise a proper marketing system or even to finance what money will come to the producer, according to the price of eggs, out of the deficiency payments.
An element of competition will come in here, too, because under the Scheme, as the Minister explained and I should like to confirm further, if the packing stations can get 2d. a dozen more for the eggs than was obtained up to a certain time, that 2d. will go to them. They will be on their mettle to secure better prices and to induce consumers to pay them. They will obtain those better prices only if the eggs are packed and graded in the best possible way. Therefore, an element of competition and of initiative still remains with the board and with the packing stations.
It is also the case that if prices go down the packing stations and the board will feel the effect, though not as much as they will do if prices go up. There are ample securities for the consumer under Sections 2 and 4 of the Agricultural Marketing Act, 1949. If any of the packing stations, or the board, abuse their powers it will be possible for the Minister, on complaints being raised, to deal with the matter by direction. The consumers will be safeguarded in the same way as they are now safeguarded under the boards which deal with milk, potatoes, and wool. Producers will have a steady market, and the board must take all the eggs that are produced. That is another important matter. It was not the case under the voluntary scheme.
It will also be possible, under this Scheme, to finance a publicity campaign. such as that which the Milk Marketing Board has successfully carried out. There is no doubt that the Milk Marketing Board has succeeded in immensely extending the market for milk. Dairy farmers pay back a small levy of what they get and the fund so formed goes towards the encouragement and publicising of milk sales.
§ Mr. Philips Price
That is another matter.
I am certain that if we had not had a milk publicity campaign, the saturation point of the consumption of milk would have been reached long ago, but, because of the campaign, the consumption of milk has been expanded and the same will happen with eggs. There will no doubt come a point—and we are probably reaching it now—when, unless the retail price comes down, the sale of milk will not be as elastic as it should be.
Modern dairy farmers with their new methods of production could easily stand a lower price to a certain point because of lower costs of production. Modern dairy farmers are always facing up to the problem of reducing their costs to help to make the consumers use as much milk as possible.
I am sure that unless we have a scheme of this kind, it will be impossible to advance a scheme for publicising eggs and encouraging their purchase and boosting the fact that British eggs are the best on the market. The small producer with 50 hens or fewer will have his chance to carry on. A very large number now sell their eggs to packing stations. Those sales will continue and probably expand.
I know a Gloucestershire packing station of which I am a member. When it first started, there was great difficulty, because people sold their eggs to the packing station when eggs were cheap, and, when eggs were dear, they sold them privately and got it both ways, with the result that the packing station was hit both ways.
The tendency in the poultry industry now is for prices to even out throughout the year. There used always to be a shortage during the autumn when hens and pullets were moulting. Now, owing to the fact that there is much more hatching in January, February and March, pullets are coming into lay in the autumn. Consequently, the tendency has been for there to be less disparity in prices throughout the year. There will, 366 therefore, be less reason for the small producer to want to run to the packing station at one time of the year and not at another.
Egg production is increasing all the time. The deep litter system is becoming more popular and is helping to produce more eggs and there are other systems, such as the battery system, about which I do not know so much, but which is said to be even more efficient. We shall have even greater production of eggs throughout the year and the packing stations will thus come more into their own. The first necessity is to get the Scheme through and the next thing is to see that the farmers and egg producers vote for it.
§ 10.40 p.m.
§ Mr. Anthony Hurd (Newbury)
The hen has indeed led us into some strange ways this evening. Hon. Members on both sides of the House have been subjected to a great deal of propaganda. both for and against this statutory marketing Scheme. The objectors have been a good deal more ingenious and persistent than the sponsors of the Scheme, but hon. Members have evidently used their own judgment and thought n good deal about the pros and cons of this Scheme. It is evident from the debate that the majority of hon. Members have come to a wise conclusion.
I think that this Scheme is a wise blending of the interests of the producers, the consumers and the taxpayers. The producers will continue to have an assured basic level of price for their eggs, even though the Government goes, out of State trading in eggs, and there will be placed on the producers the direct responsibility for developing the market. I as a Conservative, believe it be very important that the producers of any kind of farm commodity should have a direct responsibility and a direct interest in the efficiency and economy of the methods by which their products reach the consumers. I say that this Scheme passes those tests. I believe that it gives a continuing price assurance and makes the producers directly responsible for the efficient and economic marketing of this product.
Consumers will be assured of continuing and ample supplies of fresh eggs. say "fresh" eggs, because a great deal of nonsense has been talked about the time it takes for an egg to be collected 367 from the farm, tested, graded and packed. I wish that my right hon. Friend could get the name of the stations changed from packing stations to testing stations. After all, it is the testing and not the packing that matters to the consumer. Testing gets rid of the eggs which may have a fault, such as a blood spot or a faulty shell, or be stale. I am sure that the consumer will continue to get an ample supply of fresh eggs, and, indeed, even fresher eggs, as the testing station programme continues to expand.
Today, the British consumer is getting eggs at a cheaper price than the consumer on the Continent of Europe. Were that not the case, we should have Danish eggs coming here instead of being sent to Western Germany and Belgium. Consumers are benefiting by the present arrangements and that will continue under the Scheme.
§ Mr. Hurd
I stated as a fact, and it is a fact which I will confirm, if the hon. Gentleman did not hear it the first time. that eggs are cheaper in this country today than in Western Germany and Belgium. Otherwise, Danish eggs would be sent here rather than to other continental countries. That is what I said, and I repeat it for the benefit of the Liberal Party.
The taxpayer will benefit under this Scheme more than by the continuance of State trading in eggs. No blank cheque is to be given the producer. Indeed, we are in no danger of blank cheques being given to the producers either of milk or eggs. With eggs. as with the scheme for milk, the producer will have to match the market with efficiency and economy in the distribution of eggs to the consumers and by better salesmanship. If they make a good and economical job of it, they will score; if not, they will fall down. I think that that is right, and the Government will not have to underpin all the weak places in the distributive system. Part of that will have to be done by the producers themselves.
There is no question at all of a monopoly. The producer who does not want to sell his eggs through the Scheme need not do so. He can hawk them 368 direct to the consumer, as I used to do before the war, or sell them to a retailer. In this Scheme there is no monopoly affecting the producers and, certainly, there is no monopoly affecting the consumers. They can buy direct from the producers, or go to a retail shop that buys direct from the producers. They need not necessarily buy eggs which have passed through what I prefer to call testing stations. On all those counts I am sure that we are right to send this Scheme on its way with our almost. if not complete, universal blessing.
§ 10.45 p.m.
§ Mr. F. Beswick (Uxbridge)
My right hon. Friend the Member for Don Valley (Mr. T. Williams) amused himself by poking fun at some of the objectors to this Scheme, but the fact. is that, apart from the people whom he listed, every conceivable interest in this industry also lodged objections. They ranged from the producers, the packers and the retailers to the consumers. Interests representing more than half the total retail trade, who do know something about eggs, objected to the Scheme.
The Commissioner himself said, in paragraph 45 of the Report:Accepting as I do, that the absence of competition, the denial of choice to the housewife and the difficulties of enforcing the present Scheme are valid objections and are not outweighed by any of the advantages claimed by the promoters, the easy course is to report against the Scheme as a whole.Tonight, however, we have the Scheme before us. One would have thought that, against all the conglomeration of objections, there would be some very urgent and compelling reason for the Minister to introduce the Scheme in the face of these doubts and objections. The fact is that there is no crisis facing the industry, such as those which faced other sections of the agriculture industry in the 'twenties and 'thirties, about which my right hon. Friend spoke.
The Minister himself indicated the increase in total output. Over 60 per cent. of home-produced eggs already go to the packing stations. As has been said, there are now 666 separate packing stations compared with 200 just before the war. Probably the most remarkable feature of the whole business has been the growth of the voluntary agricultural producer cooperatives, which now handle over 40 per cent. of the eggs which go from the packing or testing stations. In addition, the 369 Co-operative Wholesale Society, which also knows something about this and also objected to the Scheme, handles in its own packing stations an additional 3 per cent.
The industry has faced successfully competition from abroad, and today imports are negligible. Therefore, there is no question of this being an industry in decline. This is not a matter of an industry which has to be rescued from depression. I accept the point made by the Liberal Party and by spokesmen of the Conservative Party that a voluntary organisation with self-help and initiative is better than compulsion, and in this industry self help has been going from strength to strength.
Why at this stage, therefore, do we have to bring in a Scheme which vests most extraordinary powers in the hands of this board? No indication has so far been given of the administrative expense of the structure which it is proposed to set up. We ought to have more information about that. The point I wish to make is that, on the basis of the pre-war history of the industry, we should have tried a little longer and a little harder to encourage the voluntary principle. It was the voluntary principle which existed in the agricultural co-operatives in the two countries to which one of my hon. Friends referred. He might also have mentioned, beside Holland and Denmark, New Zealand, where the voluntary agricultural principle has been encouraged and has been most successful.
§ Mr. Philips Price
But they were working for an export market. They had not got a market like the one we have. There is a great difference.
§ Mr. Beswick
I should have thought that it would have been easier to organise one's home market than to organise against competition overseas.
§ Mr. Beswick
The fact is that in this country, organising for the home market, the voluntary principle has been expanding successfully, and it seems to me wrong to suggest that the alternative to the proposed Scheme is chaos. The Commissioner was quite categorical about this and said in page 19 of the Report,I fail to see any danger of a return to pre-war conditions if the present arrangements continue.That seems to be the opinion of many people.
370 I also speak as a member of the Cooperative Movement. I am not opposed to orderly marketing—not at all. Nor do I want to see a return to laissez-faire. I do not want to see low prices for the consumer at the expense of the producer. It seems to me that a lesson which we have learned not only in this country, but throughout the world, is that in the long run it is in the interests of the consumer equally with the producer that the producer should get a fair price. What we do not want are the booms and slumps. We want the orderly marketing of tested and graded eggs.
If it is accepted that it is in the interests of the consumer as much as the producer that these things shall be arranged, why do we want a board of this kind? Why does the Minister put forward proposals for an organisation which is to be controlled by a board of which 17 of the 21 members shall be elected by the producers themselves and only four appointed by the Minister? How can we persist in arguing that this is a national industry which has a national service to perform when it is to be controlled by a narrow sectional interest, admirable as that interest may be?
No one would for a moment seek to justify this kind of representation in a manufacturing industry. It is simply that we have a hang-over from a period when sympathies were with the depressed agricultural industry of the 'twenties and 'thirties. We are today operating in a different kind of world from the world of those days; there is a different economic situation. We should make an adjustment accordingly.
If the producers are to be encouraged and helped to organise their own industry, why arm them with these powers of compulsion over their fellows? As the Commissioner said, in page 18:If the packing station egg is as good as the promoters and the trade say, it is bound to succeed given the present prohibition of wholesaling, and the packers will consolidate their position and advance rather than break down.The very fact that these powers of compulsion are needed seems to me to be a criticism of or lack of faith in the Scheme. We should be relying for some time longer, I feel, on the voluntary organisation.
Reference was made by the hon. Member for Huddersfield, West (Mr. Wade) to the penalties which are to be exercised 371 by the disciplinary board. I cannot imagine why we made such a fuss under the Restrictive Trade Practices Act about giving power to members of a trade court to impose a fine on their fellows when here, by Statute, we are giving some producers, responsible to no one but themselves, the possibility of imposing a fine of up to £100 plus half the price of the eggs which any offending producer might have sold. These are extraordinary powers, with no right of appeal to the courts at all.
I sympathise with those independently-minded producers who also object to the Scheme but who, in seeking A licences or B licences, are still compelled to make all such detailed returns to the board, who, incidentally, are their competitors. That seems to be quite wrong.
I do not want to go into a lot of detailed criticism. One could make a lot of the difficulties of enforcement. I must say that I do not see how many people are to be required to go round checking up on this number of 50—and not just 50 birds, but 50 birds of a special age. They must be over six months old. That work will entail a lot of waste of administrative manpower at a time when we can ill afford it.
While I am on the point of administration, can the Minister give any assurance that the levy of ½d. a dozen on sales will be adequate for the future? Does he really think that that will be the maximum amount which the board will need to raise for administrative purposes? I rather fancy that before so very long it will want to increase that maximum.
Reference has also been made to the board's improving the efficiency of production, but there is absolutely nothing in the Scheme to indicate that it will engage in any sort of research. It is not, apparently, to be empowered itself to produce eggs, which would give it the facilities to carry out research. The board is empowered to do a lot of things, but the power to engage in useful and necessary research for efficient production and improvement of the quality of eggs—research which probably could not be carried out by the rest of the industry—does not seem to be vested in the board. I should like the Minister to tell us whether he envisages that the board will carry out that kind of research.
372 I want to say something about the argument used against the voluntary principle. As I understand, the main argument used against continuing a voluntary co-operative system is that there would be no power to ensure a steady flow of eggs through the packing stations throughout the year. That has been answered in part by my hon. Friend the Member for Gloucestershire, West (Mr. Philips Price). Recent history has indicated that the peaks have been ironed out; that it is possible to eliminate, to some extent, the flush period. The ratio between flush and lean period is now about 2 to 1, as against the former 4 to 1.
It does not necessarily follow, therefore, that there will be this readiness to go to the packing stations in the flush period with a surplus of eggs, and then to sell outside in the free market in the lean season. But even if that is not so, can the Joint Parliamentary Secretary say whether he is quite satisfied that under the present Scheme there will not be this same problem? The A and B licence holders, I understand, can still send their surplus eggs to the packing stations in the flush period. If so, we are facing the problem of the flush period in any case, even though we do vest the board with all these powers of compulsion and consequent penalties.
I come to the initial poll. I believe that if this Scheme were put to a free vote of the House—we have had objections from the Liberal, the Conservative and the Labour benches—it is doubtful whether it would be approved. Even if it is approved, it will still have to go to the industry. Can the Parliamentary Secretary tell us the conditions under which the producers will be asked to vote? Will it be made clear to them that they are not voting for or against a guaranteed price? Will they be told what the alternative to the Scheme will be? Will the Minister assure them that the alternative to it is not the complete elimination of the guaranteed price?
If they have that assurance, I think that it is quite probable that the producers themselves will not give it the necessary two-thirds majority. As there is this doubt in the industry itself, as there have been doubts expressed by the retailers and by the representatives of the consumers, it seems to me that the 373 House ought not readily to approve the Scheme in the first place.
§ 11.0 p.m.
Sir Ian Orr-Ewing (Weston-superMare)
I apologise for intervening and detaining the House even for a few minutes, but there are one or two points which I should like to have clarified.
I am surprised at the speech of the hon. Member for Uxbridge (Mr. Beswick). He did not appear to me to like anything at all under the Scheme or outside it. He hated booms and slumps. He did not seem to like any form of organisation.
§ Mr. Beswick
I said that I favoured the extension of the voluntary system of agricultural co-operatives. If that is not enough, I would have gone on to say, had there been time, that I prefer the independent marketing commission.
Sir I. Orr-Ewing
What we are surely doing is to examine as a House, first. whether there is anything in this Scheme contrary to the public interest. I must say, having examined this matter, and having heard all the arguments inside the House and outside, that I cannot say that I see anything within the Scheme which is contrary to the public interest. I cannot see that the consumer stands at risk. Therefore, I do not think that on that ground I could possibly oppose the Scheme.
Secondly, we have to examine whether minorities among egg producers are likely to be bullied or to find life intolerable, or whether they are likely to be enforced into a straitjacket within which they find they cannot earn a living. There again, I think the safeguards are fairly secure. Surely that is a matter upon which the producers themselves have to vote.
In principle, the machinery of this Scheme would appear to me—and I am not an egg producer—to safeguard the interests of the minority, or the small men, call them what we may. I do not think that anything that has been said or written on this matter would confound that argument.
There are two right hon. Gentlemen in the House at present who know a lot about marketing schemes. I myself was at one time in the position of what used to be described by the late Mr. Maxton as neither fish, flesh, fowl, nor good red herring. I happened to be Parliamentary 374 Private Secretary to a previous Minister of Agriculture. We were greatly interested in the development of improved marketing schemes. One can take it as a fairly good axiom that those schemes which have been initiated in the way that these schemes were gradually evolved, not only by Ministers but by the House as a whole, have been evolved along sane lines, and we have arrived at the position where the producer cannot hold the consumer to ransom. That was the danger about any form of marketing scheme at all, and in that respect we are fairly assured.
There is one other small point that I should like to raise. When these schemes are put before the public and appear before the House, surely they should be so devised and drafted that they can be clearly understood by everybody. The drafting of some of these paragraphs confounds my imagination. We find an alarming statement in page 14, where the sub-heading immediately above paragraph 44 has the sinister wording, "Partners, deaths. etc" That really is a most extraordinary juxtaposition of words.
Are not those words worthy of differentiation? I should have thought so. I hope that there are some hon. Members here who are partners. I hope that everybody within the Scheme will be a partner. To say "Partners, deaths, etc." seems to be a very peculiar way of describing the matter. I cannot understand it.
Then, again, there is an important paragraph at the bottom of page 22—paragraph 73 (2). I do not know whether anyone has read that carefully, but if any small producer can understand it then he deserves to be not a small producer but one of the biggest in the country—the sort of I.C.I of egg producers. This is how it reads:All the provisions of sub-paragraphs (2) to (8). both inclusive, of paragraph 70 shall apply to Producer's B Licences as they apply to Producer's A Licences so, however, that the Board shall from time to time prescribe the forms of application for a Producer's B Licence and for the renewal thereof which forms shall require the applicant to specify therein the names and addresses of the persons to whom at the date of the application he proposes to sell under the licence.It is perfectly clear to anyone who drafts that, clear to the Department and to the Minister. But I hope that he will explain it to the small egg producer. It is rather a shame, because they are people for whom we have the greatest 375 sympathy, and I beg that when these schemes are drafted a form of words will be devised which the lawyers will not understand but the laymen will.
§ 11.6 p.m.
§ Mr. Arthur Moyle (Oldbury and Halesowen)
For some years I have looked with a great deal of interest on the fights that took place between what one might describe as the "Divi." members and the other members of the Labour Party, headed by the present Lord Quibell and my right hon. Friend the Member for Don Valley (Mr. T. Williams), against the present Viscount Alexander of Hillsborough, who was then the esteemed leader of the Cooperative Party. With the legislation before us tonight, due entirely to the Minister of Agriculture, we have had a return to the conflict between the consumers' and producers' interests, represented here by the Co-operative Party and by the Minister on behalf of the Tory Party.
One of the astonishing things about this House is that one never knows what will happen. Here we have the Minister of Agriculture, with his devastating charm, selling to the Tory Party the art of snooping and the principle of the "closed shop". And the Conservative Party has swallowed it, bell, book and candle, with one or two minor exceptions, unlike the hon. Gentleman the Member for Leominster (Mr. Baldwin).
I have been an advocate of the closed shop for the trade union movement for a lifetime, yet here is the Minister of Agriculture supporting the principle of the closed shop. The only reservation he makes is that he is quite prepared to allow a few free producers to exist by means of the Egg Marketing Scheme on the clear understanding that they do not get the benefit of the subsidy—that is, those who are in receipt of or possessing 50 head of poultry. If they want to opt out they can do it, but they do not get the subsidy.
In principle, I am all in favour of orderly marketing. I have always stood for reasonable security for the producer. and a fair deal for the consumer. I do not think that I am quite as capable of pursuing the middle road, with the same arts and graces, as the hon. Member who spoke for the Liberal Party 376 tonight, the hon. Member for Huddersfield, West (Mr. Wade). The way he steered between sin on one side and virtue on the other was absolutely amazing.
This Scheme has an astonishing amount of machinery about it, and I should like to know whether the Minister can bring the cumbersome machinery by which the Scheme is to be operated within something like measurable proportions. We have the board; we have the joint consultative committee; we have the advisory committees; we have a general election scheme here and we have the returning officer. We have all these officials running about for the board, the advisory committees and the joint consultative committee. I should think there must be about 400 officials provided for in this Scheme.
The Minister, who is not very keen on inspection, although he has come down 100 per cent. in favour of it tonight in this Scheme, is to provide an army of inspectors. My right hon. Friend said there were about 800,000 poultry keepers. I understand that in this Scheme there will be about 300,000 poultry keepers. It will be an arduous and costly job to go about inspecting making sure that they are all keeping their accounts and books properly and doing everything they must do to fulfil the conditions for receiving their licences under the Scheme. The job will require an army of inspectors.
Particularly in view of the appeal that the Chancellor of the Exchequer has made for everybody to be engaged in productive work, I would ask the Minister to look at the Scheme again with a view to simplifying the machinery, and to making it less profitable for unproductive officials, because they constitute an on-cost upon the work of the producers. What is certain about this Scheme is that it will provide a considerable number of people with nonproductive employment.
It will certainly mean that the packing stations will be secure in their profits. In passing, I would support the hon. Member for Newbury (Mr. Hurd) in his suggestion that the stations should be described as testing stations and not as packing stations, because, after all, testing is the main function for which they exist.
377 What do the Government get out of it? The Minister is pursuing for eggs the same policy as is pursued by the Minister of Housing and Local Government for housing. That Minister says to the nation, "Let us knock politics out of housing by foisting the responsibility for the provision of houses entirely upon the local authorities." The Minister of Agriculture says, "Let us knock politics out of the subsidy," and places the whole responsibility for administering the subsidy upon the board. Therefore, any criticism to be sustained for administering the subsidy will in future be borne by the board and not by him.
One of the defects of the Scheme is that the control breaks down at the point of the first sale. There is no further control by the board after that, though the eggs have still to pass from the retailers to the consumers. Will the Joint Parliamentary Secretary answer this question? How will the consumer get fresher eggs than now, if this Scheme is adopted? I ask because one of the leading members of the board said the other day that if the housewife knew her job she would not buy an egg that was less than ten days old. That is a reasonable paraphrase of what he said. If that is the language used by a present member of the board, it does not encourage us to expect the consumers will get fresher eggs from the producers than they do at present.
§ 11.15 p.m.
§ Mr. Frederick Willey (Sunderland, North)
I see that the Joint Parliamentary Secretary is anxious to reply, and I want to ask him a few questions calculated to embarrass him before he does so. First, is there any hidden significance in these proposals? The reason I ask is that, on page 31 of his Report, the Commissioner says:Another line of criticism is that this Scheme is merely the flag flying before the launching of a Fatstock Marketing Scheme. A statement publicised as coming from the N.F.U. since the Inquiry seems to establish that this allegation is a fact.If we look at the statement issued by the National Farmers' Unions, we see that in answer to Question 3—Why have a scheme?—the National Farmers' Unions say:No scheme means … the guaranteed weekly price will go and be replaced by some form of deficiency payments to the industry as 378 a whole. This is bound to be unsatisfactory for producers—look at what has happened with fat cattle.Is this the first sound of the bugles in retreat? Are the Government admitting that their policy has been disastrous to the producers and that we are now to get a new policy with regard to the payment of the guarantees to the producers; or does the Minister find himself once again in disagreement with the National Farmers' Unions?
I ask the Joint Parliamentary Secretary to deal with another problem. What about the egg and poultry industry? The Minister mentioned the present price of eggs. What is the effect upon the subsidy? Can the hon. Gentleman tell the House the Government's attitude towards the egg subsidy? Will they allow the egg subsidy to run up to sustain a lower retail price? This is a matter of vital importance to the industry just at present.
One has only to look at the general census figures to realise that the industry may be facing difficulties similar to those now facing the milk producers. Those affected are entitled to know the attitude of the Government towards the industry and whether the Government are prepared, through the subsidy, to sustain a retail price which will enable the industry to face any difficulties it may face in the flush of next year. In view of this, I should have thought we would have heard more from the right hon. Gentleman about the problems of the egg and poultry industry, and that we might have heard something about the progress being made in the industry in technology and the economics of industry, but of that we have heard nothing.
We know that the promoters are making a point about pooled transport costs. I do not wish to discuss the merits of that proposal, but I would like to have heard the Minister's view about it. Is it his view that the outlying producer should be supported in this way, or does he believe that the time has come when we should think more broadly, perhaps, of supporting the outlying producer for social and broad agricultural reasons?
The Minister touched upon the vital question of the subsidy and referred briefly to the enabling clause. It is true that it does not appear in the Scheme as it appears before the House tonight, but we are obliged to the right hon. Gentleman for telling us what he has in 379 mind. I, for one, felt that what he told us was most unsatisfactory. I can imagine that the Treasury feels some relief that it has a Scheme which can be said to provide some incentive to the packing stations to get the best out of the market, but we know how the Scheme would have acted adversely against the subsidy had it been in operation in previous years. The subsidy would, in fact, have been £6 million more in the last year for which we have the out-turn figures. I should have thought the Minister would have dealt with that point also.
Quite apart from that and the fact that the Scheme shows itself, in the light of current experience, to be expensive, I should have thought that the Minister's common sense would have told him that any subsidy payment based on this estimated realisation price over the year is a had formula and that it provides every inducement to create a pessimistic outlook on the figures for the coming year. It is a very inefficient way of calculating the subsidy.
The Minister knows that many people, in particular the Committee on Public Accounts, have criticised the present system of distribution of the subsidy. I am not criticising the packing stations as such when I join with the Committee on Public Accounts in its criticisms. But surely, in view of the constant, reiterated criticisms of that Committee, the Minister and his Joint Parliamentary Secretary would agree that it does not meet that criticism merely to preserve the status quo, for that is what the Scheme does in the system of payments. All the administrative criticisms which were made remain, because the administration remains the same. I should have thought that the right hon. Gentleman would have dealt with that cardinal point.
We all know that during the operation of the interim scheme there have been violent fluctuations in price. Does the present Scheme offer any better guarantee against those fluctuations? We all must recognise that considerable profits have been made by people who held stocks in the light of these fluctuations. The right hon. Gentleman has not told us of any way in which he will satisfy the public—for public money is involved here—that the holding of stocks shall not be used by individual packers and whole- 380 salers to their great profit. I should have thought that the right hon. Gentleman, in the light of this experience, would have been bound to say that we on this side of the House have been right in our constant argument that the only way to make these guaranteed payments is by fixed floor prices, with seasonal variations, paid on grading.
I emphasise the financial side, because we ought to know that it was because of these financial arrangements that the Scheme was brought forward. We know that the Scheme did not come into being on the initiative of the National Farmers' Union. It came in reply to the Minister's proposal that there should be deficiency payments. I should have thought that the Minister would have endeavoured to satisfy the House about these financial arrangements, since they involve a very substantial subsidy.
We on this side of the House, of course, accept the packing station structure. We accept the need to improve the marketing arrangements. As my right hon. Friend the Member for Don Valley (Mr. T. Williams) pointed out, we have been consistently in favour, and remain in favour, of producer marketing boards. This was expressly stated in our election programme at the last General Election. I would say to those of my hon. Friends and hon. Members opposite who have criticised this Scheme that we should remember that it is appearing against the background of guaranteed prices. Whether there be a scheme or not, or in spite of a scheme, the producer is to be entitled to his guaranteed prices. Therefore, we should not be extravagant in making allegations against the producer in this case.
It is also a fact that the Labour Party proposed an egg commission. I again emphasise that an egg commission does not rule out a producer board. The proposal for an egg commission was made only because of the functions. An egg commission might affect the scope of the functions of a producer board, but it was proposed not because of any opposition to a producer board, but because it was thought that here were functions which could not be exercised by a producer board.
I call the attention of the House to the very wise words used by the then 381 Minister of Agriculture in a debate in 1938. when he said:Such a large proportion of individual poultry-keepers are in a small way of business, however, that the regulation of marketing under a producers' marketing scheme would present a very formidable task; moreover, it is doubtful whether a producers' marketing scheme would be the most effective, or indeed, the most appropriate, machinery for securing, for example, the standardisation of grades. since this is an object which necessarily involves the regulation of marketing practices in the wholesale and retail distributive trades."—[OFFICIAL REPORT, 11 th July, 1938; Vol. 338, c. 904.]I will at once concede that the same position does not obtain today, but those grounds are still valid.
It is for those reasons that we proposed that for certain functions a commission would be required. There is also the matter of the subsidy, about which we have had no satisfactory explanation from the Minister. I am certainly not satisfied by what has been said that this is the most efficient or effective way of administering the subsidy.
There is the further difficult question of variable supplies subject to seasonal fluctuations. I entirely accept the right hon. Gentleman's argument that the fluctuations are upon a very sensitive market. It is for that reason that we have to envisage some control over supplies, whether imported or home produced. Imported supplies have for the moment become such a minor part of our total supplies that we should be prepared to safeguard ourselves against the importation of supplies having an abnormal effect on the market at home. Home supplies pose the same problem of providing some machinery for removing temporary surpluses from the market. It is because either of those actions would affect and would be calculated to affect the retail prices that it is at any rate arguable that these are matters which would be better handled by a commission.
I emphasise that it is for those reasons that a proposal for a commission has been put forward and not because of any innate allergy towards a producer board. On the contrary, we have supported a producer board and we can envisage within the commission a place for a producer board for eggs. What we are considering, as my right hon. Friend the Member for Don Valley said earlier, is something different. We are considering the role 382 of the producer board where we have no commission and where we have an utter absence of Government policy, an absolutely negative attitude from the Government showing, to quote the hon. and gallant Member for South Angus (Captain Duncan), that the Government are out of the egg business.
The Government still have a responsibility if only because of the subsidy. They have a responsibility to the producers in any case. It is because we have to face this position that we have some very real doubts about the efficacy of the present proposals. I have some very real doubts about the Commissioner's Report. I concede that it is very entertaining, but I find that on important issues it is lacking in consistency. It is unfortunate that the Government have done worse than accept the Commissioner's recommendations—they have gone further.
We have to recognise that if the purpose of this Scheme—and this is the purpose put forward by the promoters—is to encourage—we do not want to exaggerate too much the element of compulsion—the recognition and acceptance of a standardised article, the graded egg, and so encourage its consumption, it is unfortunate that the present Scheme provides for such a wide measure of exemption. After all, at present one-third of the aggs do not go through the packing stations. The hon. Member for Kidderminster (Mr. Nabarro) is not present in the Chamber, but we have had the comparison, odious though it be, continually made between the fresh egg and the graded egg. This is likely to be aggravated if the number of birds is to be increased to 50 and we have A and B licences which the producer can obtain as of right.
I regret to say that I am not overenthusiastic about advertising. The milk advertising campaign has not succeeded. The consumption of milk has fallen this year. The Milk Marketing Board may say, and one cannot dispute it, that, but for the advertising campaign, the fall would have been greater. As a consumer I see appeals to eat fish, drink beer and drink milk, and now it will be to eat eggs. These appeals, as a totality, have little effect on me. Some advertisements I prefer more than others. I very much like the Milk Marketing Board's advertisement of an attractive young lady 383 drinking milk, but I judge these advertisement on artistic grounds rather than on consumer merit. We can exaggerate too much the effect of advertising.
We support this Scheme, we do not oppose it. We wish the producers good luck. We hope that they can inculcate into the market a sense of greater orderliness and we hope the producers will appreciate the importance of a recognised standard egg. But at the same time we are disheartened by the fact that the Government have shown an entirely negative attitude to the problems of the industry, problems both of production and distribution. They have produced a Scheme which, to me at any rate, appears to be inadequate and not calculated to attain the object of broadly gaining the acceptance of a quality standard for eggs; nor for improving the speedy and efficient distribution of eggs.
The real failure of the Government—and it is why I began with my first question—is to do anything to restore the disturbance which has come to the agricultural industry.
§ Mr. Willey
That is the real failure of the Government.
I have read the long-term policy, and I can understand the relief of the members of the National Farmers' Union at being told that their income will decrease only by a certain amount each year. I should have thought that in other circumstances it would have been a statement regarded as far from encouraging. It is because it has been so regarded that we can appreciate the disturbance at present existing in this industry, and unfortunately this Scheme will do nothing to relieve it. While we accept and do not oppose this Scheme, we can only say that we are disappointed that the Government still maintain a negative attitude and have not taken a positive and strong attitude towards this vital and important industry.
§ 11.35 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. G. R. H. Nugent)
We have had a very interesting debate during which a variety of views have been put from all sides of the House. I will endeavour to pick up as many points as I can in making a reply.
384 First, in replying to the hon. Member for Sunderland, North (Mr. Willey), I really feel that perhaps the night has been wearing on a little for him and that he has been dreaming. The agricultural industry is not in a disturbed state at the present time. It has never been more optimistic. I have no time to go far into the general picture there—and I think I might be ruled out of order if I did—but it would be one which would be entirely creditable to the Government.
The answer to the specific point which he made about payment of the deficiency payment on eggs, if the retail price runs lower than was estimated, is that we shall meet it. We are indeed doing so now, and we shall implement the price guarantee as we made it at the last Price Review. With regard to pooled transport costs, our view is neutral. That is why we agreed to the Scheme carrying a provision which leaves it for the producers to decide for themselves. If those with the lighter costs wish to help out those with the heavier costs, we feel that it is up to them to decide.
No financial agreement could be made until a Scheme has been brought into operation and a board has come into being. As soon as the board has been constituted, the details of the arrangement will be settled. My right hon. Friend gave the outline. When that is done, a Section 4 Order under the 1947 Agriculture Act will be brought before the House in order to implement that agreement, so the House will have full opportunity to debate it. The financial arrangement which my right hon. Friend outlined is really a very sound one, and I feel that the hon. Member did not give it sufficient thought. My hon. Friend the Member for Newbury (Mr. Hurd) referred to it. This profit-sharing arrangement is a thoroughly good one in giving the producers a direct incentive on the one hand to get the maximum efficiency in marketing and, on the other hand, to get the best they can out of the market. I think that if the hon. Member looks into it more closely he will see that it is sound.
I turn to some of the points made by the hon. Member for Uxbridge (Mr. Beswick), who asked a series of questions. The levy can be raised above ½d. only by the resolution of the producers 385 at an annual general meeting. If they wish to spend more of their own money in that way that is up to them. I should think it is very unlikely that the board will need more, or, indeed, that the producers would be willing to vote for more. because for anything that the board has extra the producers will get less.
The board can promote research. That is provided for in the Scheme. On the question of A and B licence holders sending the balance of their eggs to the packing stations, they can do so. That answers the question of the hon. Member for Oldbury and Halesowen (Mr. Moyle). All producers can send eggs to the packing stations and get the benefit of the guaranteed price, whenever they want to. That includes those with fifty hens and under. Those with fifty and under would probably not be registered, because they do not come within the terms of the Scheme: but they could, if they wish, send their eggs to the packing stations whenever they want to.
§ Mr. Nugent
If they sell direct to consumers they do not get the subsidy, but if they sell partially to consumers and send the rest to the packing stations they get the benefit of it.
If the A and B licence holders can send their surplus in the flush period, how will the Scheme fulfil the vital requirement of enabling a steady flow to the packing stations?
§ Mr. Nugent
As with any scheme of this kind, it is a matter of trying to get a reasonable balance between the technical optimum and the human optimum. One must have reasonable flexibility in the Scheme. In fact, the volume of eggs that these people handle is not so big, in our judgment, that it would seriously disturb the flow in the packing stations. We feel that in the interests of providing flexibility and giving freedom to those who wish to sell either direct to consumers or to retailers, that provision should be in. I think that it will operate satisfactorily.
§ Mr. Baldwin
My hon. Friend said that a producer with less than fifty hens would be entitled to send eggs to the packing stations, but surely he would have to be licensed. He could not send the eggs unless he were licensed.
§ Mr. Nugent
Yes he could. He would be able to send his eggs to the packing station and he would come on the books of the packing station, but he would probably not be registered and he would not be licensed. He would be outside the Scheme.
Replying to the Question concerning what the producers will be voting on, I have here a copy of the form they will be voting on; it is on the back of the draft Scheme, and I hope that it sets the matter out in a neutral fashion. I do not doubt that the promoters will handle it in a neutral way as well.
Turning to some of the remarks made earlier in the debate, the right hon. Member for Don Valley (Mr. T. Williams) gave full and round support for the Scheme, which I welcome. I am sure that will help it on its way. His reference to the 1931 Act called to my mind a point made later by the hon. Member for Gloucestershire, West (Mr. Philips Price). If the Tories had opposed it. undoubtedly the Liberals must have supported it. It must have been embarrassing therefore to the hon. Member for Huddersfield, West (Mr. Wade) and his hon. Friends this evening when they found themselves, if not opposing the Scheme, definitely out of sympathy with it. Lest they feel any embarrassment, let me remind them that in the debates on the 1931 Marketing Act, the right hon. and learned Member for Montgomery (Mr. C. Davies) voted for the Bill on Second Reading and against it on Third Reading. In the words of the hon. Member for Oldbury and Halesowen, he steered the traditional Liberal path between sin and perdition. I hope that the hon. Members now feel comfortable again.
The complaint of the hon. Member for Huddersfield, West about male birds being included in the number of 50 is not, I think, one of substance. Birds are very rarely fattened over the age of six months. if one male were there he would be there for breeding purposes; and if, as in the case quoted, he had 50 hens, he would be pretty busy, too. He would well deserve to be counted in.
The hon. Member for Uxbridge asked about the position of a producer who had been fined. He asked whether he had a right of appeal. He has a right of appeal on points of law to a court of law. On 387 the amount of the fine, he has a right of appeal to arbitration. That is in the Scheme.
A number of hon. Members on both sides of the House, including my hon. Friend the Member for Leominster (Mr. Baldwin) and the hon. Member for Bristol, North-East (Mr. Coldrick) objected, as indeed did hon. Members on the Liberal benches, to the general structure, with inspectors, arrangements for private courts and fines. The fact is, as the Commissioner recognised, that these are essential to a marketing scheme, and if the House decided that there should be a marketing scheme, it would be inoperable without such arrangements as those, which are common to all other marketing schemes.
§ Mr. J. E. S. Simon (Middlesbrough, West)
There is a reference in Clause 85 (2) to an independent person. Does my hon. Friend envisage that the independent person, as chairman, will be paid by the board or will be a really independent person?
§ Mr. Nugent
I am afraid that I cannot give my hon. and learned Friend immediate an immediate answer to the question, who pays the legally qualified chairman of the disciplinary committee, but I will let him know as soon as I can.
I wished to address myself briefly to the issue whether or not there is a case for a marketing scheme. The fact is that today my right hon. Friend the Minister of Agriculture, Fisheries and Food is responsible for the various authorities which are controlling the marketing of eggs. Paying the minimum guaranteed price to producers, enforcing the grading and quality regulations, guiding and, to some extent, controlling the flow of eggs on to the market, trading in eggs through N.E.D.A.L., and dealing with surplus eggs—all these things are done by the Government. If they were not, the situation would be quite different. This, I think, answers the hon. Member for Uxbridge who asked: why take any action at all—there is no crisis in the industry?
There is not, it is true, but we in the Government, and, indeed, on the whole of this side, do not believe that it is the right function for Government to carry out this particular work. We believe 388 that the time has come when some other arrangements should be made to put it on a permanently satisfactory basis. There is, therefore, really a necessity to put something in its place if we are to maintain the present system, which is indeed working very well. The question is, then; what are we to put in its place —a marketing authority, or what else?
My hon. Friend has referred to the very large numbers of small units—and that has been commented on on both sides of the House—and the necessity for an organisation of some kind. About one-third of the eggs are consumed locally and sold from the farms, and about two-thirds go through packing stations. That represents about 20 million eggs a day, a pretty formidable number. Those are the eggs that go to the urban populations.
To keep this operation moving smoothly certain basic things are necessary. The first and most essential is sale by description; that is to say, the eggs must be graded for weight and quality-tested, so that the wholesalers, packers and retailers can sell them over the telephone and refer with confidence to what they have, and both parties know exactly what they are dealing with. The alternative would be that they would have to buy by actually viewing each consignment. If eggs are to be sold in these very large numbers they must be quality-tested and graded for weight. If one looks back to the pre-war system where a very large number of English eggs were not so treated, one sees the highly disorganised condition and the lower price the English egg usually commanded in relation to the imported egg, which was always graded for weight and quality-tested and, therefore, made a higher price than did ours.
Second, the Government subsidy should be paid only on first-quality eggs. They must be good, wholesome eggs and of reasonable size. Once again, we must test them and weigh them in order to ensure that. Thirdly, the Government guarantee, the price paid weekly to each producer, does need some kind of long stop buying if it is to be implemented by all packing stations. There must be a central buyer willing to take off the hands of the packing stations eggs which they cannot shift, at a price sufficient to return the guaranteed price to producers. I 389 therefore think the case is really unanswerable that there must be a central authority for the marketing of eggs if we are to retain a structure which is reasonably orderly and which will, on the one hand, give a fair price to producers and, on the other, a satisfactory supply to consumers.
§ Mr. Holt
I hope that the hon. Gentleman will not leave that point without dealing with the very important matter raised, I think, by his hon. Friend the Member for Leominster (Mr. Baldwin) with regard to the voluntary co-operative schemes. The hon. Member recalled that before the war there were these schemes, that they had increased in number and were working satisfactorily. Obviously, there is great advantage if they can be further increased. Have the Government not considered whether they cannot further encourage voluntary co-operative schemes, and whether they would not do the job just as well?
§ Mr. Nugent
I will deal with the hon. Gentleman's point in a minute. I just wanted to go on to deal with the question: why have a marketing board? But before I do so, I should like to inform my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon)— now that I have been made expert on the matter—that the chairman of the Disciplinary Committee would be paid by the board, but his appointment must be approved by the Minister. I think that I can give my hon. and learned Friend the assurance that we should certainly see that the chairman was a man of proper standing and integrity, and so would, indeed, be independent.
Returning to the general argument, the exemptions that my right hon. Friend described in his opening speech would satisfy most people, I think—although I realise not everybody—that we have made it possible for a producer, who wishes to sell retail to consumers or to retailers in his neighbourhood, to do so, and we have given a fair degree of flexibility even to the point of incurring some criticism from the hon. Member for Sunderland, North that we have gone too far. I think that as we have got criticism from both sides, we are probably about right.
§ Mr. Nugent
I think the answer is yes. If agreement cannot be reached, the arbitrator is appointed by the Minister. That is the normal machinery for arbitrations.
I think I have dealt with the questions that arose on exemptions. I would make one point on the question of licences. I rather fear that nothing that I say will completely convince the hon. Member for Bristol, North-East. Before coming to the debate this evening I read his speech in 1950 on the subject of the Tomato and Cucumber Marketing Board, and I notice that he put very similar arguments tonight, but with no less conviction.
§ Mr. Nugent
The only additional thing he mentioned was an extra 1 million members of the Co-operative Movement.
§ Mr. Coldrick
That is correct. The Co-operative Movement is not static; it is progressive. It has increased by 1 million since that occasion.
§ Mr. Nugent
I congratulate the hon. Gentleman on the membership increasing to about 12 million.
To return to the point of licences, he wondered whether the holder of an A or B licence would be troubled with conditions which made the licence useless to him. He certainly cannot be. The Scheme is specific there. The main conditions that he may be required to observe are, if he has a B licence, that he must mark the eggs—but not grade them—and he may be required to keep a record of his sales of eggs and some accounts. Those are perfectly reasonable things. A B licence-holder will be required to keep a record of the retailers to whom he sells. None of those things will stop a man who wishes to sell in that way.
The general arrangements that we have made follow the Commissioner's recommendations, and to some extent go further, but I think the general feeling in the House is that they are sufficiently flexible to meet all reasonable considerations.
The point at which compulsion applies is the sale to wholesalers. There were 391 several inquiries about this matter, particularly by my hon. Friend the Member for Leominster who asked why it was necessary. The answer is that if it is left optional to producers whether they will sell to the packing station—that is to say, to the board in future—our old friend the higgler appears. As some hon. Members have said—the bon. Member for Gloucestershire, West referred to it particularly—he offers producers a shade over the odds on a rising market. He takes the eggs to the towns, mixes them up and sells them as being full-sized eggs. He does rather well out of the retailer.
The result is that when the customer buys the eggs, she is short-weighted because she gets mixed eggs instead of full-sized eggs. Then when eggs are plentiful he does not come to collect and the producer throws the eggs back on to the packing station. The packing station, if it is a small one, is flooded with eggs which it cannot get rid of, and very soon it is out of business. One reason why there were no more than about 200 packing stations before the war was the very large number that went out of business in just that way. I can remember any number. The strong ones, in areas around London, could manage all right, but people out in the rural districts could not stand up against this competition.
I think everyone familiar with the trade will agree that if there is to be a comprehensive packing station service for all producers throughout the country it has to remain obligatory, so that all producers who are not covered by the exemptions, to which I have referred, should sell to the board and not outside it for wholesale. The hon. Member for Harborough (Mr. Baldock) referred to this, I thought, most convincingly, and I ask my hon. Friend the Member for Leominster to think again about this and to look back at the pre-war experience. I feel certain he will see that there is great weight in that argument.
392 Finally, the conclusion on this must be that producers cannot be free in this respect, except on the exemptions I have mentioned. So that brings one to the marketing board, and I do not think I need go over the alternative of the prewar Commission. The reason why we think a marketing board is best today is that we have got a comprehensive system of packing stations, so that there is a completely different situation to what there was in 1939. The marketing board has an advantage, particularly in dealing with matters like advertising, referred to by my hon. Friend the Member for Harborough, and by the hon. Member for Gloucestershire, West. Advertising is very much needed here, for a commodity which is competing with many other things. There is great scope for extending it, and there is no doubt that the board could do a big job in advertising. It could encourage prepackaging and could give greater consumer satisfaction in that way.
The safeguards are there, written into the Acts, on the one side for the consumer and the distributor and, on the other, the safeguards for the taxpayer are strengthened. by the financial agreement, which gives an incentive for the Board to get the best out of the market.
I feel that I can confidently ask the House to approve this Scheme. A central authority is needed for the marketing of eggs, to benefit producers and consumers. A Scheme of this kind involves producers in a large measure of discipline. We believe that self-discipline is best and that a producers' marketing board is the right body. I would therefore ask the House to approve the Scheme and to give producers a chance to vote on it themselves.
§ Question put and agreed to.
That the Draft British Egg Marketing Scheme, 1956, copy of which was laid before this House on 8th November, be approved.