§ Mr. Lipton
On a point of order. It would appear, Mr. Speaker, from reports in The Times and the Daily Express that the terms of the Anglo-Danish Agreement were communicated last night to a private meeting of certain hon. Members opposite. If this flouting of the dignity of the House is not a matter with which you can deal at the moment, may I respectfully suggest that, as hon. Members opposite have already had opportunity to question Ministers on this Agreement, you will exercise your discretion in allowing a little more opportunity now to hon. Members on this side of the House to put questions?
The hon. Member should leave that to my discretion. I know nothing about the truth or falsity of Press reports.
The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory)
The House will recall that from 1st to 13th June a working party of officials, on which the United Kingdom was represented, met at Stockholm to examine the problems involved in creating intimate trading arrangements between the seven countries represented there, and whether such arrangements could be so devised as to promote subsequent negotiations for a wider European settlement.
I need not emphasise the importance of this for the future of Europe and of this country. The seven countries which are now moving towards association have a considerable trade among themselves which could grow very substantially. And, even more important, the formation of this association gives us the best hope that we can see of achieving an all-European settlement and the opportunities which will flow from this.
The plan elaborated by officials provided for a Special Agreement on Agriculture and proposed that, as a first step towards the elaboration of it, there should be discussions between the interested countries on trade in specific agricultural products of importance to exporting countries.
1571 It is in that context that there have been discussions between United Kingdom and Danish Ministers over the last three weeks, which, I am glad to tell the House, ended yesterday in complete agreement. I will arrange for the text of the Agreement to be circulated in the OFFICIAL REPORT.
The object of the discussions was to deal with a question of fundamental importance to the proposed free trading arrangements between the Stockholm Group of countries. On the one hand, we and all the members of the Stockholm Group have firm obligations to our domestic food producers. On the other hand, while Denmark has a developing industry, her export trade is predominantly in agricultural products. She cannot reasonably be expected to open her market freely to imports of industrial good from her partners within the Stockholm Group unless she has some reasonable assurances about prospects for her own agricultural exports.
The Agreement reached between United Kingdom and Danish Ministers is a sensible solution to this problem. The proposed arrangements do not detract in any way from the Government's obligation to the farmer by which we are bound and will continue to be bound. The present system of guaranteed prices deriving from the Agriculture Acts of 1947 and 1957 remains intact.
In particular, the Government will not take into account, in fixing the guaranteed price of pigs, either the loss of revenue to the Exchequer arising from the removal of the tariff on bacon or the consequences of any reduction in the market price caused by the tariff change.
The specific tariff concessions which we have proposed, namely, on bacon, pork luncheon meat, canned cream and blue veined cheese have been carefully chosen so as to have the minimum impact on trade with Commonwealth countries; there are only limited Commonwealth interests in any of these four products. We have, of course, kept Commonwealth countries informed throughout the discussions.
On the other hand, we believe that these arrangements will be of material benefit to Denmark. The Danish 1572 Ministers are now engaged in recommending these proposals to their Government. I am glad to say now that if the Danish Government are able to accept them so also will Her Majesty's Government.
The next step will be the Ministerial meeting at Stockholm on 20th July.
If agreement can there be reached to proceed to set up free trading arrangements within the Stockholm Group, the agreements worked out between United Kingdom and Danish Ministers will form the agricultural content of those arrangements so far as relations between the United Kingdom and Denmark are concerned. Of course, if there is no decision to create such arrangements in the Stockholm Group, this agreement with the Danish Government will lapse.
Her Majesty's Government have every hope that it will be possible to proceed and thus create a new basis for further negotiations with other countries in O.E.E.C., including the six countries of the European Economic Community.
§ Mr. Jay
As we have all now been privileged to receive this information, can the Chancellor tell us this? Do the Government expect these concessions which, he says, are of material advantage to Denmark, to mean increased imports from Denmark into this country of bacon, pork and cheese, and, if so, do they expect that to mean a drop in home production of those commodities or an increase in consumption here? Secondly, can he say how soon the negotiations which he mentioned are likely to start within O.E.E.C. for the wider European association which I think we all want to see?
One cannot say what the consequences of a reduction in tariff would be. What is certain is that the Exchequer will lose £6½ million, but it is impossible to say at this stage whether the effect will be that Danish importers will secure a higher price for the quantity they at present import or will obtain a bigger volume at a lower price. If it were the latter result—and it is impossible to say—then, again, it would not necessarily be the consequence of that that there would be a lower production of pigs in this country, because, as the right hon. Gentleman knows, if the volume increases and the price as a result drops 1573 it is not infrequently the case that the market expands.
Because she would obtain, or might obtain, up to £6 million of additional revenue from her existing sales.
Mr. T. Williams
As the balance of trade was £40 million in Denmark's favour last year, and is running at the same figure this year, what comparable advantage is Britain likely to obtain out of this concession?
We no longer calculate our advantages and disadvantages on a bilateral basis. As sterling is now freely convertible that would be a quite distorted way of calculating our advantage. The important point is that at present we are doing trade to the value of about £350 million with countries in the Stockholm Group, and we see no reason to think other than that if this association comes off the level of trade being done between us may substantially increase.
§ Sir J. Hutchison
In view of the fact, as my right hon. Friend has said, that it is important that we should keep in mind the possibility of moving towards association with the European Economic Community, has he any reason for thinking that these proposals will be welcomed or resented by the European Economic Community? Is the Community aware of them?
Yes, members of the Community are aware of the talks which have been going on, and I have no reason to think that the fact that we are proposing to form this association between us, or discussing that proposition, is being resented at all in the European Economic Community. On the contrary, we have some evidence that some of them have quite welcomed this step forward towards wider economic co-operation over the whole of Europe.
§ Mr. Bellenger
While we are all interested in the Chancellor's optimism, so far there has been very little initiative on the part of Her Majesty's Government, since the wider European Free Trade Area proposals failed, to get a meeting between the Six and the rest. 1574 May I ask the Chancellor whether, if an agreement comes out of the Stockholm meeting, Her Majesty's Government intend to propose on their own initiative a meeting between the Seven and the Six?
Certainly. I would like to repeat that our object in this is that this move should be a step towards a wider association. If that is not the ultimate effect, this may well be a useful move, but we should be disappointed.
I apologise to the right hon. Member for Battersea, North (Mr. Jay) that I did not answer the last part of his question. I cannot, in terms of timing, tell either the right hon. Member or the right hon. Member for Bassetlaw (Mr. Bellenger) exactly at what date it will be appropriate and useful to take a step to resume negotiations for a wider area, because, of course, at this stage we cannot foresee what pattern such a wider association would have. But our hope is that this move, if it comes off, will prove not only a useful step in itself in the direction of closer economic cooperation in Europe, but a step towards the wider association which we want to see.
§ Major Legge-Bourke
In view of this very important statement, would my right hon. Friend consider inviting the Leader of the House to arrange for us to have a debate upon whether or not there is quite the support for the Outer Seven idea that there was for the wider Free Trade Area originally? Would my right hon. Friend bear in mind that it is very necessary that the horticultural industry, in particular, should be now reassured in view of the fact that a further sacrifice of tariff is involved in the agreement?
My right hon. Friend the Leader of the House will no doubt take note of what my hon. and gallant Friend has just said about a debate.
This Agreement, of course, does not deal in any way with horticulture. As my hon. and gallant Friend knows, the products with which this Agreement deals are all products which are price-supported in this country by guaranteed prices and not by tariffs. The tariff on bacon here was put on not to support the industry, but to assist the Exchequer.
Mr. T. Williams
As this is a matter of great importance to agriculture, I am sure that the Chancellor will not object to my putting one more question to him. About 40 per cent. of existing imports of bacon consumed in this country come from Denmark, and 40 per cent. of bacon consumed is home-produced. Are we to understand that the right hon. Gentleman is quite happy in the belief that there always should be a restricted market of 40 per cent. of bacon produced at home and consumed in this country?
I would not say that there is anything fixed, rigid or sacred about that 40 per cent. What we are doing under the Agreement is to give Denmark an assurance of continuance of her present opportunities in our market, and an assurance that if and as that market grows she will not be denied an opportunity of sharing in any increased consumption. If the right hon. Gentleman thinks that out carefully, he will see that vis-à-vis our own industry here we are not in any way detracting from the present guarantees. The present guarantees will remain as complete and as effective as they have been up to now.
§ Mr. Turton
In view of our firm obligation to provide a market for our home producers, will my right hon. Friend take into account the fact that last year nearly 2 million cwt. of bacon came from Poland, Holland and Ireland? Will he secure, as far as possible, that any increase in the imports of bacon does not damage the home industry, but will affect our imports from those three countries?
What my right hon. Friend has said is very relevant to this question and it does, of course, remind us that if Danish imports into this country expand it will be by no means necessarily at the expense of the home producer. It may well be at the expense of other imports into this country against which Denmark, if this association comes off, will be in a preferential position. If the association comes off the home producer will continue to receive a guaranteed price for all the home production, whether it is big or small.
§ Mr. Rhodes
May I reinforce the plea made for the matter to be discussed in the House? If a decision is made that we 1576 shall discuss it, can a White Paper be laid showing the relations of trade in the Stockholm Group and the Common Market?
§ Sir P. Agnew
In view of the fact that it is too early yet to measure clearly the effects on our home producers of bacon, will my right hon. Friend take into account, nevertheless, that the effects on a highly specialised though small home bacon-curing industry are bound to be disadvantageous? Will my right hon. Friend see whether he cannot ease the path of the factory producers who, at the moment, cannot turn their production into other channels?
My hon. Friend has raised a point of great relevance, but again I will say that it is premature to reach a conclusion on whether the curers would be damaged or not. Their fortunes will depend on the through-put of British pigs going for bacon consumption. It is absolutely impossible to say what the future numbers of British pigs will be. If I had to guess, I would say that they would show a rising rather than a falling tendency, but the fortunes of the industry depend on that fact and we have no grounds at present on which we can form a conclusion on how many home-produced pigs will be directed to the bacon as against the pork market.
§ Mr. Grimond
Can the Chancellor of the Exchequer clarify the effect of this reduction? If it results in a lowering of prices, as seems likely, is it the Government's firm intention not to raise the support price? If not, it is ambiguous to talk about keeping it intact. Further, is it not the case that the entire burden is now being thrown on this country because we and the Danes are excluded from the Six, whereas if we had any agreement with the Six the German market would be more open to Danish products? Has there been any previous consultation with the Common Market countries or with Germany before reaching this Agreement?
As regards discussion with Germany, I understand that discussions have been held between the Danes and the Germans on that point.
1577 On the first point, I think that the hon. Member is under a misapprehension. The price which may fall as a result of this Agreement if the total quantities of home produce and of imports from all sources are increased is the market price and not the guaranteed price. Under those conditions the subsidy will rise. That is why we have said that any difference in price likely to result under this Agreement will be paid by the taxpayer—[HON. MEMBERS: "Oh!"]—but under those circumstances the taxpayer will be getting a corresponding advantage from the lower prices. The producer, however, will continue to receive the benefit of the guaranteed price, which represents the difference between the guaranteed level and the average level of market prices.
§ Mr. A. Henderson
In view of the anxieties which have been expressed to those of us who have bacon curing factories in our constituencies, may I ask the Chancellor whether the Government will be prepared to receive representations from those who speak for the bacon producers of the country?
Two of my right hon. Friends have already received representations and I am sure that I am speaking on behalf of them when I say that they will be glad to keep in close touch with the representatives of the curers from now onwards, so that if this comes off we can see how it works out.
§ Mr. Gordon Walker
Can the right hon. Gentleman say whether, as was suggested in the newspapers this morning, the substance of the statement was disclosed to a private meeting of Conservative Party members upstairs yesterday, and if so, whether that was not a violation of the constitutional rule that on such important matters the House should be informed first?
The important point is that we took the earliest opportunity of informing the House of our proposals. The only way this could have been done earlier would have been to interrupt the debate last night for the purpose of making a statement. It was not thought that this would be for the convenience of the House.
§ Mr. Gordon Walker
But could not the private meeting have been put off 1578 until today? Why does that have to take precedence of the House? Is it not an outrageous departure from proper constitutional procedure?
§ Sir J. Duncan
Is my right hon. Friend aware that since 1956 the British and Danish bacon interests have agreed in their own interests that Danish imports should be limited to benefit both Danish and British prices? Is there any reason to suppose that those Danish and British interests should not continue to abide by that kind of agreement, particularly since, if the Agreement is broken, the Danish producers will be in a much weaker position than the British producers, because the British producers will have a guaranteed price to save them and the Danish will not?
I agree entirely with what my hon. Friend has said. I see no reason why those useful talks should not continue. It is a voluntary understanding to which my hon. Friend is referring.
§ Several Hon. Members rose—
Order, order. I thought that the right hon. Gentleman had finished his explanation, but in view of my duty to the House I must ask hon. Members to look at the clock.
§ Miss Herbison
On a point of order, Mr. Speaker. May I ask for your guidance? All the questions asked so far apply to farming, and since the statement was made in preparation for the Stockholm meeting, which will deal with many other matters, there are others of us with national and constituency interests who wish to ask questions of the Chancellor. Only questions on farming have been allowed so far.
§ Mr. P. Williams
Further to that point of order, Mr. Speaker. A statement has been made by my right hon. Friend which could be of great importance to Commonwealth trade and there has not been a single question put on this matter yet. Can you not possibly arrange for questions to go on for another few moments?
§ Mr. Willey
Further to that point of order, Sir. When giving your view about that, will you take into consideration the fact that some hon. Members have had a full opportunity of discussing the matter privately in a room upstairs at a meeting at which prior notice was given? I would like to know when that notice was given. The fact is that such a discussion has taken place between some hon. Members of the House. In those circumstances, is it not proper to allow the House generally more licence than is ordinarily allowed following a statement of this nature?
I know nothing about the meeting upstairs. I have only heard about it since it was mentioned here this afternoon. I am responsible to the House for seeing that the business of the House is conducted. We have had a lot of questions. The hon. Lady the Member for Lanarkshire, North (Miss Herbison) and other hon. Members have said that certain matters have not been discussed, Of course, I do not know what questions will be asked when I call on an hon. Member. I think that the House will agree with me that there has been a reasonable allocation of questions on the statement. No doubt there will be a further opportunity to debate it in full when we have read it, but I must ask the House now to get on with the business which has been set down for today.
§ Mr. Jay
Further to that point of order, Sir. A question has already been addressed to the Chancellor which has not yet been answered, and which would only take a quarter of a minute to answer, namely, was there such a meeting held upstairs yesterday, or not? Can you not give time for the Chancellor to answer that question?
§ Mr. Speaker Does it arise out of the statement?
Then perhaps the right hon. Gentleman ought to answer it. He does not seem inclined to do so, however.
§ Several Hon. Members rose—
§ Mr. Gordon Walker
On a point of order, Sir. May I ask you whether it 1580 falls within your responsibilities to the House to ensure that important statements on Government policy are made first to the House, and not made to a secret meeting of hon. Members in some other part of the House upstairs, of which notice was given? Has the House no prior right to have information from the Government? If so, have you not possibly the responsibility of protecting that right of the House?
Order, order. I am already dealing with a point of order. The hon. and learned Member must resume his seat. I have no responsibility whatever in the matter. I do not know what private meetings are arranged by parties in the House. I am never consulted and I do not desire to be consulted in the matter. My responsibility to the House is to try to get the business of the House carried through in as quick and orderly a manner as possible.
§ Mr. Gordon Walker
I was not suggesting that you should have prior notice or be consulted, Sir, but, after the events have occurred, might you not be responsible for inquiring into the facts?
I have no responsibility in the matter. In the course of my life as an hon. Member of this House I have known of many statements made to committees upstairs consisting of hon. Members of all parties.
§ Mr. Woodburn
On another point of order, Sir. The Chancellor of the Exchequer has today made a statement which involves further discussions with the other members of the Stockholm Group. The paper manufacturers, of whom there are quite a number in Scotland, are very much disturbed about the repercussions on their industry. I wonder whether the Chancellor can say whether consideration will be given to their difficulties?
I could not allow that as a point of order. No doubt there are all kinds of interests involved in this matter, and no doubt we could consume the whole of today quite profitably in discussing it. Unfortunately, the House has set down certain Orders of the Day and certain business, so it is my duty to see that it goes on, leaving it to hon. 1581 Members, through the usual channels or otherwise, to arrange a full discussion if they want an opportunity for one.
Meanwhile, I must obey the rules of the House, which has set down certain Orders of the Day. That is all I can say about it. It is in my discretion to allow what I consider to be an adequate period for examination and elucidation of a statement, during which hon. Members must make the best use of their opportunities. I cannot continue with this matter now.
§ Several Hon. Members rose—
§ Miss Herbison
Further to the original point of order that was raised. You have suggested, Mr. Speaker, that we may have other ways and means of raising these matters. I have listened to the announcement of the business for next week, and this Session of this Parliament is now almost finished. The point raised by my right hon. Friend the Member for East Stirlingshire (Mr. Woodburn) is the point which I myself wish to raise. What chance are those of us who have an important paper factory in our constituencies—[An HON. MEMBER: "Put down a Question."]—to have to find out from the Chancellor whether any arrangement has been made or guarantee given as a consequence of the meeting with the President of the Board of Trade earlier this week?
The announcement of the business for next week is not rigid and by no means inflexible. These arrangements are frequently altered. The hon. Lady and any other hon. Members can elucidate points in which they are interested by means of Parliamentary Questions. This is still open to them for the remainder of this Session. This is a perfectly proper subject for Parliamentary Questions, though I do not see why it should be included in today's business after the statement we have heard.
I do not think that that would be proper, after I have already said that we should stop now, which binds the right hon. Gentleman as well 1582 as other hon. Members. I do not think that it would be proper. The House should bear in mind that we have had a good discussion, so far as we can go at the moment, and that we ought now to get on with today's business.
§ Mr. Lipton
On a point of order. You will recollect, Mr. Speaker, that when I asked Question No. 13 earlier today, you advised me not to put a supplementary question, or did not allow me to do so, on the ground that a statement was to be made later. I hope that after taking the trouble to put down a Parliamentary Question on this matter, I shall now be given the opportunity of asking a supplementary question of the Chancellor.
I am sorry about the hon. Member's Question, but he was proceeding to put a supplementary question without hearing the Answer, and I do not think that that was right. Now that he has had the opportunity of getting a full statement. he can consider it and put down another Question later. I think that that would be the best course for him to adopt.
§ Sir H. Butcher
On a point of order. I should like to ask you, Mr. Speaker, whether you could indicate in any way that the majority of hon. Members would be happy to allow the conduct of business to remain in your hands?
§ Mr. Hector Hughes
May I put this point of order very respectfully, Mr. Speaker? You have said that you know nothing about a meeting upstairs. It has been stated by hon. Members that there was a meeting upstairs—a Tory Party meeting—at which disclosures were made. Will you not take notice of what an hon. Member says when he says that there was such a meeting upstairs? Will you not take it as an accepted fact that there was a meeting upstairs, since the Member who states it takes the responsibility for the statements he makes in the House? In common fairness, ought we not to be allowed to put questions?
§ Mr. A. Lewis
Further to the point of order raised by my right hon. Friend the Member for Smethwick (Mr. Gordon Walker). When my hon. Friend the 1583 Member for Brixton (Mr. Lipton) first raised this matter at 3.30 p.m., you rightly said at that time that you had no knowledge of the point my hon. Friend had raised. The statement has now been made and has not been denied by the Chancellor. Am I not right in suggesting to you that to have a special statement by the Chancellor of the Exchequer lasting from 3.30 p.m. to 4.15 p.m., taking up Parliamentary time, on a matter which was discussed upstairs, without you being informed beforehand, is, to say the least of it, very discourteous to you? Asking for your permission to make a statement when, in fact, the Government knew that a statement had been made and discussed was discourteous. Should not the Government at least have the decency, before asking your permission to make the statement, to inform you of that fact?
§ Following is the text of the Agreement:
§ Agreed Statement by United Kingdom and Danish Ministers
§ In preparation for the meeting on 20th July when the Ministers of the seven countries of the Stockholm Group will consider whether to establish free trading arrangements within the Group, Danish and United Kingdom Ministers met in London on 6th, 7th and 8th July. The Danish Ministers were Mr. Krag, Minister for Foreign Affairs, and Mr. Skytte, Minister of Agriculture. The United Kingdom Ministers were Mr. Maudling, Paymaster-General, and Mr. Hare, Minister of Agriculture. The Ministers discussed the problem of trade in agricultural products bearing in mind the need for reasonable reciprocity for agricultural exporters within the Group. Similar discussions were taking place between Denmark and other members of the Stockholm Group.
§ The Danish Ministers asked that the United Kingdom Government should give undertakings about their import and support policy in respect of those agricultural products in which Denmark has an export interest. These undertakings should provide safeguards against frustration of the objectives of any agreement concluded between Denmark and the United Kingdom including any specific tariff concessions contained therein. Furthermore, they asked that any agreement between the two countries should facilitate freer and increased trade in agricultural products by opening to Danish producers increased opportunities in the United Kingdom market.
§ The United Kingdom Ministers referred to their obligations to home producers and particularly to those arising from the 1947 and 1957 Agriculture Acts, by which they are 1584 bound. The United Kingdom Government, recognising the traditional nature of the trade relations between Denmark and the United Kingdom, did not intend to adopt policies likely to deny Danish producers the opportunity to maintain their market in the United Kingdom for commodities of concern to them or to share in any increase in the United Kingdom market for those products.
§ Further, the United Kingdom Ministers undertook to recommend to their colleagues that, as part of the proposed arrangements within the Stockholm Group, the United Kingdom tariff on imports of the following products from Denmark and the other members of the Group should be abolished according to the following timetable:*
Bacon and canned pork luncheon meat†
Reduction of 50 per cent. on 1st July, 1960.
Reduction of 50 per cent. on 1st July, 1961.
|Blue Veined Cheese||To be abolished on 1st July, 1960.|
§ Danish Ministers asked for a statement of the United Kingdom Government's policy regarding the production of pigmeat, eggs and milk. United Kingdom Ministers replied that on eggs, milk and pigmeat it is the Government's objective that production should be more economic. On the volume of the output of eggs, the Government's policy continues to be that less eggs should be produced, as was stated in the White Paper Cmnd. 696 of March, 1959. On milk, the United Kingdom Ministers recalled that both in 1958 and 1959, at the time of the annual price reviews, the policy had been that less milk than was then in prospect should be produced.
§ The Government's policy continues to be that producers of milk in the United Kingdom should not in general be encouraged to produce more milk than is required for the liquid milk market, after allowing for a sufficient reserve to ensure that the market is adequately supplied throughout the year. It is also the Government's policy that increased consumption of liquid milk should be encouraged. On pigmeat, the Government's policy continues to be as stated in the 1958 and 1959 White Papers.
§ Danish Ministers also asked for an undertaking that the removal of the United Kingdom tariff on bacon would not be frustrated by subsidies. United Kingdom Ministers reserved their right to determine annually the guaranteed prices for pigs, with due regard inter alia to changes in costs. But they agreed to recommend that subsidy policy should not be used in such a way as to render nugatory the opportunity given to Danish producers in the United Kingdom market under this agreement.
§ * For planning purposes it is assumed that the first tariff reductions under any free trade arrangements agreed between the Stockholm Group countries will take place on 1st July, 1960.
§ † Definition of canned pork luncheon meat; Tariff Subheadings 16.02 (c) (1) (b) (i) and (iii): Canned meat consisting wholly of ground or chopped pork with or without curing or seasoning ingredients or farinaceous fillers.1585
§ The United Kingdom and Danish Ministers recognised that industries in each country engaged in trade with the other may be materially injured by the competition of dumped or subsidised exports from third countries. The United Kingdom Government has powers under the Customs Duties (Dumping and Subsidies) Act, 1957, to impose, consistently with its international obligations, anti-dumping or countervailing duties where such material injury is caused or threatened. Ministers agreed to recommend that, if after consultation it is established that such injury is caused or threatened, their Governments should consider taking action consistent with their own legislation and with their international obligations to remedy the injury or prevent the threatened injury; any matters arising in this connection should be dealt with as expeditiously as possible.
§ Ministers agreed to recommend that provision should be made within any agreement between the two Governments covering the matters dealt with in this statement for the periodic examination of its operation and of any particular difficulties that may arise.
§ The Ministers agreed that if it is decided to establish free trading arrangements among members of the Stockholm Group, the agricultural content, so far as the United Kingdom and Denmark are concerned, will be as set out in this joint statement.