HC Deb 23 October 1956 vol 558 cc512-25

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Dye

Surely, we must stop here for a minute to consider whether we are to continue with a scheme for subsidising the keeping of breeding cattle on our hill farms when, as is already indicated, we have too many cattle for the country's requirements—we have either too many or too much beef is coming from other sources.

In the well-known farming paper that comes out today, the Farmer and Stockbreeder, I saw under the fatstock prices : Lower prices for all classes of Livestock; Fat Cattle decline continues, Pig Trade Buoyancy disappears, Lamb prices less steady. Those of us who do not go to political conferences in the Summer Recess but stay at work on the farms, learned that the Minister of Agriculture had announced that he was to give £10 million more in subsidy for fatstock which have already gone to the market, been killed and eaten. Here we are being asked to continue a system of subsidies to provide more of these cattle. When I and other hon. Members raised this matter on Second Reading the Joint Parliamentary Secretary tried to ride off with an assurance that everything in the agricultural industry was really working out to the common good, that it was all wrong to say that people were losing confidence.

In the light of the present circumstances, would it be right to say to the hill farmers "You should continue to keep more breeding cattle and sheep on the hills," when we know that the money they receive for those animals as they come off the hills is less than it was a few years ago and cannot possibly cover the cost of production? There is no point in rearing store cattle on the hills if those who purchase them cannot graze, fatten and sell them at a price which will cover all costs.

Surely this point has been emphasised during the last three months. The Parliamentary Secretary should re-read the speech which he made on Second Reading when he was then being urged to extend facilities to dairy farmers on the hills. He said that the Government could not be expected to include milk production on the hills because there was already sufficient milk being produced elsewhere. Here are the very words which he used : …it must be right when already the milk supply is in excess of the demand of consumers in this country, and through progressive improvement in technique and production, is showing every sign of rising further. It cannot be right to be spending substantial sums of public money in order to assist the milk producers to produce even more."—[OFFICIAL REPORT, 20th July, 1956; Vol. 556, c. 1640.] If that was a sound argument in relation to the production of milk, is it not equally a sound argument in relation to the production of beef? If the Government have not the means of providing sufficient money to meet the deficiency payments in order to bring up the price of fat cattle to the guaranteed price of 151s. per live cwt., if those who have been producing fat cattle during the whole of this year have been doing so at a loss, why should we continue with a scheme that encourages people to do what is not needed?

I heard a little while ago that the price of Argentine beef has fallen by about 6d. per 1b. on the London market. If we have got this abundance of imported beef, how can we justify the continuance of this form of subsidy which encourages people to produce even more? Surely every kind of subsidy that Parliament grants should be designed to enable an industry to be carried on productively and at a profit. If the cattle-rearing industry continues as it has done this year, we are surely luring people into a trap. We are luring people to do something which at the end of the year they will not find profitable.

Here is a chance for the Government to justify this Clause. If they cannot do so, it ought to be withdrawn from the Bill and should not receive the assent of the Committee. Unless the Government can give a clear indication that the calves which they expect to be reared under this scheme are needed, will be profitable to the rearers and will fetch a price on the market that is satisfactory to the producers, this scheme ought to be discontinued.

4.45 p.m.

I believe that we ought to rear and fatten all the cattle we possibly can, but the producers must receive the right kind of encouragement. It has been indicated that in 1957 there will be a greater import of beef into the country than in 1956, and if this tendency continues I should like to know why we should maintain this system of subsidies for cattle rearing.

Many people who in the past have bought store cattle are not buying them to fatten now. I know of many farmers in Norfolk who, during the past year, have purchased store cattle from various parts of England, Scotland and Wales, but they are not doing it this year because they are not prepared to carry on their business at so great a loss.

I want to hear from the Parliamentary Secretary something different from what he said in his Second Reading speech. He said that the Government would prevent a deluge of imports and prevent things from happening which would lead to a decline of the beef producing industry. When are the Government going to do this? It seems to me that the Government either have no control over the situation or have no information which is really necessary in order to give to the producers of beef cattle sufficient confidence and encouragement to continue with their work. In the present circumstances, many of them will give up.

Why should we continue with this system of subsidies? We do not want to keep people busy on the hills merely for the sake of keeping them busy and to continue pouring out money in support of hill farm legislation. We do not want to pour out money in deficiency payments just for the sake of doing so. We want a sensible arrangement for the production of cattle in this country. If, in order to maintain that state of affairs, there must be adequate controls over imports, we want to know when those controls are going to be operative. Otherwise this money will be wasted, and people will be wasting their time on the hill farms in conditions which are not pleasant. Nowhere can the feeding of cattle during the winter months be described as a pleasant task, although it is essential.

I am expressing the feeling of the great mass of people connected with rearing and fattening stock in this country when I say that it is foolish to continue with this subsidy and to promise a still larger deficiency payment, when by the proper organisation of this type of farming the country could obtain the beef that it wants in increasing quantities and in improved quality.

If we can build up, from the base, the beef producing industry in this country and in the islands close by, then we can do that, but not on the basis of the present known policy of the Government. I say that this Clause requires far more justification than was indicated in the speech of the Joint Parliamentary Secretary on Second Reading.

Mr. Whitelaw

The hon. Member for Norfolk, South-West (Mr. Dye), in attempting to speak somewhat against this Clause, has painted a very gloomy picture. He has, of course, left out one half of the story, because it did not happen to suit his case. He has spoken about fat cattle, but not about sheep. I think the hon. Member will agree that the state of the sheep trade at the moment shows that sheep from the hills are very much needed, and that trade is very good just now. The first point is that the subsidies have undoubtedly done a great deal of good. If the hon. Member would come with me to some of the markets in my constituency, he would see that a large number of the sheep coming into those markets come off the hills as a result of these subsidies, and he would also see that there is a very good trade in them. I would say that that completely justifies the use of these subsidies as far as sheep are concerned.

When the hon. Member speaks about fat cattle, I agree that certainly the trade has not been good, but surely the Minister's recent announcement about the extra money to be given to support the guaranteed price, together with his statement that he was not going to stand idly by and see the beef trade deluged with imports from abroad, shows that the Government are determined to have a flourishing beef trade in this country.

This Clause is a further indication of that determination, and I personally support it without any hesitation. In doing so, I wish to ask a question on one small point of administration of these subsidies in the past. I understand that, in practice, it is found that a particular farm qualifies for the subsidy with a particular number of sheep or cattle, but when that land is improved it is often clear that more sheep or cattle could be kept on it. The subsidy numbers, however, remain as they were before the land was improved. That is the position as I understand it. If I am wrong, I shall be very pleased, but, if I am right, I hope it is possible to do something about it, because encouragement should surely be given to people to improve their land.

Major Sir Duncan McCallum (Argyle)

I feel obliged to say something in reply to what the hon. Member for Norfolk, South-West (Mr. Dye) said a few moments ago about the bad condition of our beef farms this year.

I am astonished to hear a Norfolk man say that the feeders of beef cattle are going out of business in his county. I cannot believe that the hon. Member has attended many of the marts in Scotland in the last two months. I have attended many of them, and I have sold beasts at one or two of them. To my astonishment, I found that from as far away as the East Riding of Yorkshire and Norfolk buyers were still coming to buy and were glad to buy. To my great regret, however, they have been getting their cattle considerably cheaper than I would have liked, and I think that the hill farmers who are producing these store cattle feel very sore that they are not receiving as much for them this year as they did last year.

When one compares this year with last year, one realises that prices last year were extreme. The hon. Member for Norfolk, South-West says that this year prices are worse than they have been for many years. Not at all. Prices are slightly worse than last year, but much better than in 1954 and in previous years. I would try to console the hon. Member today by saying that some of his own people are coming to the North to buy our store cattle, and I hope he will not persuade the Government to stop these subsidies, because they are of great assistance in the rearing of hill cattle.

I want to quote one case of a man who was a neighbour of mine and who was a feeder of store cattle. He was doing very well, and he used to give me excellent advice on the economic way of feeding these cattle. Three years ago he went out of farming, and, when I asked him why, he said, "Well, you see I am getting too old for it. Farming is a business, and I have made a good business out of it, but now I am going because I am too old." He retired to the neighbourhood of Edinburgh.

At one of the marts at which I was selling cattle recently, I saw him, and he actually bought some of my calves. I said to him, "I thought you had gone out of the business, because you said farming was a business and it was not worth it now that you were too old for it?" This man evidently thought it was worth it this year to buy calves and store beasts to start to fatten them for the beef trade. Therefore, I hope that my hon. Friend and his right hon. Friend the Minister will not listen too much to what the hon. Member for Norfolk, South-West said just now, but will still continue to give us these subsidies.

There is one point on which I would support the hon. Member, and I am sure that the Minister will tell us something about it. It is this question of imported Argentine beef. There is no doubt that it is causing grave concern—not so much anxiety as disquiet—among farmers. The statements that have been made in the last week or two by the Minister have helped to calm them a little, but it is true that we should like to have something from the Front Bench tonight to indicate that there will be some means of curbing or controlling the situation so that the importation of Argentine beef—the chilled beef which is so very badly wanted by the housewives of this country, and we have to be rather careful about that—should not be allowed to ruin or even badly to affect the hill farmer who produces the store stock which are to benefit from this Bill.

Mr. Nugent

I am grateful to my hon. Friend the Member for Penrith and The Border (Mr. Whitelaw) and my hon. and gallant Friend the Member for Argyll (Sir D. McCallum) for putting the eloquent intervention of the hon. Member for Norfolk, South-West (Mr. Dye) into slightly more realistic perspective. While I take the point, which is a fair one, when he asks me what is the prospect for beef in present circumstances, when I am asking the Committee to approve this commitment for seven years ahead, I feel that, at any rate in some of his remarks, the hon. Member was drawing the long bow rather long.

To deal with one small point raised by my hon. Friend the Member for Penrith and The Border about the question of reassessing the numbers of livestock that can be kept on a holding and that can qualify for the subsidy after a scheme has been approved, the answer is that there is no rigid line about it at all. Provided that there is no obvious overstocking, we are quite willing to accept for qualification all the livestock then on the holding, and the hon. Member need have no anxiety on that point.

Turning to the main point raised by the hon. Member for Norfolk, South-West, I can reassure him at once that Government policy on beef production is what I discern to be his own wish and hope for such a policy—to encourage the maximum beef production from our own farms, and from these hill farms with which we are particularly concerned today as the basis for breeding stocks. That has been our policy and it continues to be our policy. I accept the point made that due to the volume of imports, there has been disquiet in the minds of farmers as to what the future is likely to be. These circumstances have come about because of the combination of the increased volume of imports with a system for calculating the deficiency payments which has a time lag inherent in it on a falling market. This has resulted in a lower gross return to the farmers on the average than we had intended with the guaranteed price level of 151s. for the year.

5.0 p.m.

I certainly feel bound to make the point to my hon. and gallant Friend the Member for Argyll that we do need a considerable volume of imported meat in this country if our housewives are to have enough. We have a considerably increased volume of production from our own farms; we hope and believe that that volume of production will continue to increase, and by all kinds of measures we are helping it. Despite that big increase, however, we still need considerable imports if housewives are to have enough. This is in fact the first year since pre-war days when the combined supply from our own farms and imports has given our housewives the same level of beef consumption as they had in prewar days. None of us, on either side of the Committee, would wish the housewife to have less than that—in other words, supplies are coming in in order to meet current demand.

It is an unfortunate combination of circumstances that, due to the machinery of calculating the deficiency payment, the combination of the market return and the deficiency payment has not brought the average return up to the level which we guaranteed. That is the reason why my right hon. Friend has announced his intention of coming to the House to ask for approval to make a supplementary payment which will bring the average return up to approximately the level that we had guaranteed. If we can devise a better system of calculating the deficiency payment and implementing the guarantees, we shall certainly do so.

I feel the right time to go into this in detail—as I am sure you will quickly remind me, Sir Charles—is when we are bringing the necessary Order before the House, and I must not, therefore, go further now ; but I felt I could not say less than that in order to leave the Committee in no doubt at all that now that we, the Government, are asking the Committee to approve this Clause, which will have effect for another seven years, we do intend to see that beef production is reasonably profitable, we do intend to implement the price guarantee which we have given, and we do intend that these small farmers on the hills shall have a good prospect in the stock rearing in which we are encouraging them.

Indeed, the other measures which we have taken in this connection give further substance to that. On Second Reading, I announced to the House that it was the Government's intention to pay the £10 a year for seven years for the hill cow, which thereby gave long-term continuity for those farmers ; and, as the Committee knows, we have also announced that we intend to make the guarantee payment for next year not less than the current level of 151s., so that for 1957–58 farmers know that they have this prospect ahead of them as well.

There are many aspects of this subject which I should like to develop further, but I feel certain the Committee will not wish me to do so now, and I doubt whether you, Sir Charles, would allow it. I must, therefore, content myself with leaving the matter in general terms. I hope I have said enough to convince the Committee, and, indeed, farmers and the community, that whilst it is the Government's intention to see that we have an adequate meat supply in this country—imports combined with home production—we certainly intend to see that we not only maintain the present level of production from our farms in livestock products, in beef and sheep, but that we also increase it—and continue to increase this form of primary production which we regard as absolutely basic.

I can roundly repeat my right hon. Friend's statement that we do not intend to see our own beef market flooded out by a deluge of imports. It is a difficult matter to keep the balance precisely right, but I hope that I have said enough to ensure that this Measure here—a generous provision for the future—which I am asking the Committee to approve will give to these men that sense of security that we wish them to have in the future.

Mr. Dye

I was very disappointed by the speech of the Joint Parliamentary Secretary. I thought he would give us a little more arithmetic. He did say that it was the intention of the Government to continue the £10 a year subsidy for the cows kept on the hills. The cows, of course, usually produce one calf each, and each calf, when reared, qualifies for a subsidy of, I think, £7. That is £17 at the beginning. That is what we are asked to continue.

When the calf reaches a weight of about 10 cwt. live weight, at present it qualifies for a subsidy of about £12 10s. That brings it up to only 128s. per live cwt. To make it up to what the Joint Parliamentary Secretary said he has now promised for the next year, to 151s., requires another £11 10s. In other words, for each calf reared in the hills which reaches 10 cwt. at slaughter time, the total subsidy is £41, for a beast which is sold on the market at the present time for about £48.

That suggests to me that the people who will be asked to continue to rear calves will say, "How long will the British taxpayer go on paying all that money?". Therefore, I feel that the hon. Gentleman has left the matter in a very unsatisfactory state ; farmers and cattle rearers all over the country will be asking themselves how long the Chancellor of the Exchequer will go on with this subsidy together with the other one and the further one which is promised, which will run at the rate of £41 per head of 10 cwt. when the beasts come to the butcher. The situation will cause them to think very seriously indeed.

Mr. Nugent

May I very briefly reply to the point which has been made? The structure of the subsidies is this : first, £7 10s. for heifer calves and £8 10s. for steer calves ; in addition to that, the rearer on the hills would be getting £10 a cow. The farmer outside, of course, does not get the £10 a cow. The guarantee payments at present are perhaps something of the order of £12 per animal being presented. Therefore, for the farmer in the lowlands, there is a total guarantee payment of something of the order of £20 an animal ; it will go higher as the guarantee payment goes higher, and might go as high as £25. For the man on the hills, if we take into account the £10 per cow, the figure would be £10 higher. That class is receiving the extra £10 payment because of the exceptional conditions on the hills, and I am quite certain that everybody here and, indeed, outside, would think it well justified.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Bill reported, without Amendment.

Motion made, and Question proposed, That the Bill be now read the Third time.

Mr. T. Williams

I ought to tell the House that it is not my intention to detain it for more than a few minutes, but, as the original Hill Farming Act was passed in 1946, was extended in 1951 for five years, and is now to be extended by the present Government for a further seven years, I should like to thank the Government for the compliment that they are now paying the Labour Government when they were in office. This Government have not been half as successful when producing schemes as, apparently, Labour were when they were in office. This scheme will now be continued for a total of seventeen years. As the Joint Parliamentary Secretary has quite truly said, the Government think it right to extend it and are happy to do so. They feel that it makes a great contribution to our agriculture and also, as I know the hon. Gentleman feels, to our national economic situation. We thank the Government for the compliment that they are now paying us.

My hon. Friend the Member for Norfolk, South-West (Mr. Dye) has been making some observations about the calls from the Government to the industry from time to time for a larger quantity of this or that, and when the farming community has responded and produced the goods, the Government have failed to make provision to receive, market and to dispose of them in a quite sensible manner.

We had, first, the pig muddle. Also, three times in four years the Government wanted tillage; then they did not want it, were not sure about it, and finally wanted as much of it as they could get, after they had lost about half a million acres of tillage. The Government wanted more beef. Quite properly, we all want to see more beef, and beef of the right quality, too. They started what is now known as the rolling system of payment. [HON. MEMBERS : "Rock and roll."] I do not know how much rock there is in it, but it has definitely been rolling a bit.

While only six or seven months ago the Government guarantee payment was about 5s. per cwt., it is now nearer 25s. per cwt. The Government—I am pleased they are doing it—are having to repair the damage of the very faulty scheme which has been operating over the past fifteen or eighteen months.

My hon. Friend the Member for Norfolk, South-West said something about imported Argentine meat. At present, we cannot avoid the importation of some meat; we should be hopelessly short unless we had some. However, it is possible here and there, if the will exists and the policy is right, to exercise some control if only to avoid a disaster within our own industry at home. But we cannot talk about fresh breezes and liberty and freedom—not to mention squeezes—and at the same time have power in our hands to exercise the control that we want to exercise when the situation requires it. That is the unfortunate position of the Government at the moment. I agree with the Joint Parliamentary-Secretary that there will be an opportunity in a few days' time of dealing with this "rock and roll" payment system, and it is not for us to delay matters tonight.

In 1946, thanks to a report from a certain Professor Ellison and another from Lord De La Warr, who both emphasised that our hillsides were part and parcel of our agricultural industry and that we required the maximum use from them if we were to produce the quantity of meat needed in this country, the Hill Farming Act was passed. A great deal of the credit goes to them. We on this side accept no credit. We were just the operators who saw the wisdom of doing the right thing following the right advice. I am pleased that the 1946 Act and the extending Act of 1951 have both proved very valuable, and I am equally happy to know that the Joint Parliamentary-Secretary, despite a certain slow-down, considers that the extension for the further seven years will be a really fruitful investment from a national point of view.

Therefore, not only would we not dream of opposing the Bill, but we give it our hearty support on Third Reading. I hope that nothing will happen, either with sheep or beef cattle, or any other animals, to "upset the applecart" of the Hill Farming and Livestock Rearing Acts.

5.14 p.m.

Mr. Nugent

I thank the right hon. Member for Don Valley (Mr. T. Williams) for the support he has kindly given to the Bill to send it on its way. Indeed, I thank the House for the support that has been given and the interesting debates we have had both today and on Second Reading. Whatever was the source, the right hon. Gentleman handsomely paid tribute to the De La Warr Committee which, to some extent, he regarded as the source. We are certainly ready to pay tribute to the right hon. Gentleman and to his hon. and right hon. colleagues. We are glad to learn from any source. We have had a valuable Measure and we are pleased to carry it on.

I think I have made it plain that, despite whatever doubts the hon. Member for Norfolk, South-West (Mr. Dye) or the right hon. Gentleman may have, the primary industrial objective is increased meat production. Despite temporary undulations, that is what we intend to get. We intend to create conditions which will continue to get it, as, indeed, we are getting it now.

Whilst we are ensuring that farmers who go in for these schemes get an increased income, we are vitally concerned, and especially in Wales, to stop rural depopulation. This is a most important Measure from the sociological point of view. The Act has done a good deal already, and I am certain that these Measures will continue to do more in the future. T thank the House for the support it has given and I now ask it to give the Bill a Third Reading.

5.16 p.m.

Mr. Dye

My right hon. Friend the Member for Don Valley (Mr. T. Williams) did a great deal in introducing the original Hill Farming Bill and took great interest in its administration while he was at the Ministry, and I realise what a debt the people living in the hills owe to him for all he did in that respect.

I did not in any way intend to oppose this Bill. I do not say that there is anything wrong with it. What are wrong are the other aspects of the Government's agricultural policy, and this part cannot possibly thrive unless the other parts are put right. It is merely puting a lot of the money down the hills if we are to encourage greater production without also a proper scheme, not only of marketing and slaughtering the cattle, but of controlling the imports of beef into this country. The whole must be knit together into a sound agricultural and food importing policy if the country is to have both efficient production and marketing and if the taxpayers are to be saved the enormous expenditure which has been undertaken.

We realise that there is a tremendous expenditure, but it is due to the fact that the people who handle the cattle after they leave the farms and before they get to the housewife via the butchers' shops are getting such enormous profits that there is a lack of confidence because the Government's policy is not complete. It has had a good foundation on which to build from my right hon. Friend the Member for Don Valley, but the Government have failed to complete the building and the policy is incomplete. It is costly to the nation and will eventually, I believe, bring about the downfall of the Government if they do not remedy the defects.

Question put and agreed to.

Bill accordingly read the Third time and passed.