§ The Minister of State, Board of Trade (Mr. A. R. W. Low)
With your permission, Mr. Speaker, and that of the House, I will make a statement about the outcome of the negotiations with the Danish Government on the conditions which should govern the import of bacon after the expiry of the present long-term purchase contract: on 30th September next. I apologise to you and the House for the length of the statement.
These negotiations have now been concluded, and the Agreed Minute will be published as a White Paper, copies of which will be available on Thursday. The negotiations arose out of Her Majesty's Government's intention to restore the trade in imported bacon to private hands at the end of the long-term contract and thereafter to apply the general 10 per cent. ad valorem duty to imports of foreign bacon and pork, while continuing duty-free entry for supplies from Commonwealth countries and the Irish Republic.
Before the war imports of bacon were not subject to duty, but were subject to a system of quotas which gave a preference to Commonwealth suppliers. In 1947 Commonwealth rights to quantitative preference on bacon were safeguarded by a provision of the General Agreement on Tariffs and Trade, but 'it was also stated in Annex A of the Agreement that it was the intention that the preferential quantitative arrangements should be eliminated or replaced by tariff preferences, and that negotiations to this end should take place as soon as practicable among the countries substantially concerned or involved. The proposed replacement of the quantitative preference by a 10 per cent. tariff preference has, therefore, required discussion with Denmark as the supplier of most of our bacon imports. Moreover, duty-free treatment for imports of Danish bacon is guaranteed under the Anglo-Danish Commercial Agreements of 1933, 1938 and 1949.
The Agreed Minute resulting from the negotiations takes note that the United Kingdom Government has decided to apply a 10 per cent. ad valorem tariff, provides for the necessary modification 1014 of the 1933 and subsequent Agreements, and authorises us to inform the Contracting Parties to the General Agreement on Tariffs and Trade that negotiations with Denmark for the establishment of the proposed tariff preference have been concluded.
We, on our side, have given the Danish Government certain assurances. Having regard to the great importance for the Danish economy of the bacon trade with the United Kingdom, we have undertaken to consult with the Danish Government, on request, if at any time events should occur which are likely to affect the United Kingdom market so as to cause substantial injury to Danish producers. We have also undertaken not to increase the rate of duty on Danish bacon above 10 per cent. ad valorem. In the event that we at any time apply quantitative restriction to imports of Danish bacon, we have agreed to suspend the tariff and, if we allocate quotas to individual countries, to allocate to Denmark the share of total imports of foreign bacon provided for in the 1933 and subsequent Agreements, subject to our obligations under the G.A.T.T.
It has also been arranged that there shall be regular joint reviews of market prospects for bacon in the United Kingdom.
The Agreement will remain in force for four years from 1st October next.
Mr. T. Williams
Is this an agreement, or is it an imposed settlement on Denmark? Secondly, I should like to ask what are these private assurances, referred to in the statement, which are not named. Finally, is this 10 per cent. duty designed to reduce the cost of living in this country?
§ Mr. Low
There is an Agreement, as I have said. The Danish Government took note of our intention to increase the tariff. The Agreement does not say whether or not they agreed to that. What they have agreed to is the consequential steps necessary under the various Agreements, including the General Agreement on Tariffs and Trade. The last point which the right hon. Gentleman put about the cost of living is one for my right hon. Friend the Minister of Agriculture, Fisheries and Food, but I do not accept that this tariff will necessarily increase the 1015 price of bacon. Moreover, this tariff is very much preferable to a rigid system of quota preferences.
If the right hon. Gentleman believes that, is it the Government's intention to stop short at bacon and not spread tariffs on all imported foods? Would he be more frank in his reply to my question: was this an agreement, or was it an imposed settlement of which Denmark has merely taken note because she had no alternative?
§ Mr. Low
We do not reach imposed settlements with our friends, such as Denmark. It is quite clear from the statement that there is an Agreement on the subjects which I have mentioned in the statement. If the right hon. Gentleman and the House will study the agreed Minute when it becomes available, they will see that I have been completely frank with the House and with him.
§ Major Legge-Bourke
Is my right hon. Friend aware that this change from quota to tariff and preference is a most welcome step? Will he bear in mind that the old levy subsidy principle of the 1932 Wheat Act is a system which never put up the price of bread? That may well reassure hon. Members opposite.
§ Miss Herbison
Will the Minister explain in very simple terms, so that the housewife may understand, how a 10 per cent. tariff will not raise the price of bacon for her? If it does not do so, who is to pay the 10 per cent.?
§ Captain Duncan
Is my right hon. Friend aware that we on this side of the House welcome the abolition of State trading in bacon and regard this Agreement as a challenge to the British bacon producer, who has increased his production from under 30 per cent. pre-war to 49 per cent. today, to increase that proportion against the Danish industry?
§ Mr. Willey
Does not the right hon. Gentleman realise that he is replying for the Government and that he ought to give the information to the House? Is he saying that the Government do not know what effect this Agreement will have? Can he assure the House that the Danes will not impose retaliatory duties on British exports to Denmark?
§ Mr. Low
I am fully aware that I am replying for the Government, and also that my right hon. Friends and hon. Friends have the fullest confidence in my right hon. Friend the Minister of Agriculture, Fisheries and Food. As the hon. Member well knows, it is normal in the House to put detailed questions on subjects which affect them to the Ministers responsible. As to the effect upon our trade generally, our trade relations with Denmark are very good. Both we and industry attach the greatest importance to our exports to Denmark, as was exemplified by the successful and excellent British trade exhibition in Copenhagen last year. There is no sign at all that the Danes are taking retaliatory action against our exports.
§ Commander Agnew
Could my right hon. Friend say whether it is the case that this arrangement has been made, and especially the decision to impose a tariff, in pursuance of the principle of giving the British farmer the first place in his home market?