HC Deb 25 June 1959 vol 607 cc1531-46

10.9 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber)

I beg to move, That the Calf Subsidies (England and Wales and Northern Ireland) (Variation) Scheme, 1959, a draft of which was laid before this House on 5th May, be approved.

Mr. Deputy-Speaker (Sir Gordon Touche)

I think that it would be for the convenience of the House also to discuss the Scottish Scheme.

Mr. Godber

The rates of subsidy under the present scheme are £7 10s. for heifer calves and £8 10s. for steer calves. The purpose of the Schemes is to give effect to an increase to £9 5s. in the rate of subsidy for steer calves born on and after 1st April, 1959, as announced in the White Paper on the Annual Review and Determination of Guarantees, 1959. The Orders vary the existing Schemes, which apply to calves born up to 29th October, 1961, in this sense, but make no other change.

The purpose of the calf subsidy is to encourage the rearing of calves for beef. Since its introduction there has been a considerable increase in the number of calves reared, a large proportion of which are steer calves from the dairy herd which had previously been killed at a few days old. The figures for 4th June, 1958, show that there were then 1,075,000 steer calves and 1,482,000 heifer calves in the United Kingdom compared with 638,000 steer calves and 1,367,000 heifer calves in 1952, when the present subsidy was introduced. These represent increases of 68 per cent, in the number of steers and 8 per cent. in heifers. Those are rather significant figures. The quarterly figures for March, 1959, indicate that a further increase will almost certainly be shown by the 4th June figures for this year.

Hon. Members may ask why the increase has been confined to steer calves. The fact is that despite the increase in numbers I have given it is apparent there is still a considerable number of male calves being sold for slaughter when a few days old which could be reared as stores. The increase in the steer calf rate is intended to encourage more of these to be kept for rearing. On the other hand, practically all heifer calves, except obvious bad-doers that are not fit for rearing, are already being saved either for breeding or rearing for mature beef. Nothing would, therefore, be gained by increasing further the heifer calf subsidy, which is still at the fairly high level of £7 10s. per head.

I should like to mention briefly one other point. The increase applies to calves born on or after 1st April. Although we recognise that this falls within the middle of the Spring calving season, 1st April marks the beginning of the livestock year when changes in guaranteed prices of livestock and livestock products under the Annual Review award take effect. We felt that the disadvantages of making the date of the change earlier—which would have meant giving it retrospective effect—or of making it two or three months later—which might have meant that very few calves would have earned the increase during the present year, since they do not usually qualify until they are eight months old—outweighed any possible disadvantages of making 1st April the date of the change.

Since the calf subsidy was reinstated in 1952, it has made a very valuable contribution to increasing our supplies of home-produced beef, and a further increase in these supplies is very desirable in view of the drop in imports of Argentine beef. I am confident that this increase in the subsidy will result in more calves being reared for beef, and I commend the Schemes to the House.

10.13 p.m.

Mr. Frederick Willey (Sunderland, North)

This will be another debate in the series of debates that we have held on the calf subsidies. The conventional form of these debates is to repeat the questions which have been asked on the previous occasion, to receive an ineffective reply from the Government and then patiently to await the opportunity to repeat the questions the following year. I propose to alter the procedure on this occasion. I am going to ask the Parliamentary Secretary what he has done since these questions were last asked, and to add one or two questions of my own of a rather more fundamental nature.

We are discussing something of considerable importance. I estimate that this subsidy will now amount to about £14 million a year. In other words, this aid to the farmer is at a greater rate than the whole of the aid which the Government are proposing to give to the cotton industry. We have to recognise that we are considering something of considerable importance, and the House ought to be satisfied that we are making proper use of such a considerable sum of the taxpayers' money.

I now turn to the questions. The first has been anticipated. The Joint Parliamentary Secretary has referred to it. The question is: why is the operative date of the Schemes 1st April? We know that April Fool's Day is particularly attractive to the Treasury, but, as the hon. Gentleman knows, it penalises good farmers. This matter has been raised repeatedly by hon. Members on both sides of the House. I remember the hon. Member for North Angus and Mearns (Sir C. Thornton-Kemsley) saying that there could not be a worse time. It seems rather silly to pick a time right in the middle of the calving season.

The Joint Parliamentary Secretary has said that he is doing this, but he has not said why, except that it is following the livestock year, for the purposes of the Price Review. But we want a better explanation than that. This is prejudicial to all the farmers whose cows calve in February and March, which surely is not unusual. If the Schemes are doing anything they are encouraging late calving.

In any case, the Joint Parliamentary Secretary clearly must expect some-one to say that this does not affect the present season. It will not get any more calves this season. Other reasons have been put forward repeatedly in these debates, but all the hon. Member can say is that this is convenient to the Treasury. I would remind him that even Government spokesmen have conceded on previous occasions that this is not a suitable date for beef herds.

What consultations has the hon. Gentleman had? What examination has he made of the matter? I should like to see an examination made of the determination of all prices in the February Price Review. It would be outside the scope of the present Scheme to mention other difficulties which arise, but it seems to me that the Joint Parliamentary Secretary has merely stated the obvious and has not endeavoured to satisfy the House that this is not something prejudicial to the good farmer. The House is entitled to know why a more suitable date was not chosen on this occasion.

I would remind him of some other questions which are asked, and which he should have expected. Why is there no differential in favour of dehorned calves? Why have not we a weighted subsidy to encourage this? On a previous occasion the Joint Parliamentary Secretary said: I believe that it would be wrong for us to drive farmers to do something good". I cannot for the life of me see how that is relevant to the Schemes. The Joint Parliamentary Secretary is really saying, "This is desirable and it would be welcome, but we must leave it to market forces." The Schemes will interfere with market forces. At this early stage in the production cycle, they inject a subsidy.

It is quite fatuous, therefore, to refer us to the stimulus of market forces. If it is proper for the Government to give this injection at this stage it would be equally proper, if they thought a case could be made out for it—which they apparently do—to say, "We will encourage the dehorning of cattle by a weighted subsidy." When we last debated the Schemes my hon. Friend the Member for Derbyshire, South-East (Mr. Champion) said some very wise things about certification, and the need to make it more accurate. He appealed to the Government to do something about scientifically-conducted progeny testing. In reply, the hon. Gentleman said: I agree that there is a great deal to be done … We have a long way to go. He even said: I take note of the wise words he used on the matter. Why did not the hon. Gentleman come to this debate prepared to say what he has done? If this is going to the heart of the problem, it is about time that the Government showed they were doing something. It is not good enough to come to the House and ask for an ever-increasing subsidy, which comes now to the rate of £14 million. We are entitled to an effective reply to these questions, which have been asked for years.

I want now to ask two more fundamental questions of my own. As the White Paper explains, the purpose of this increase is to encourage beef production, and, as it points out, the output of beef has fallen temporarily. We all agree why it has fallen temporarily. Younger animals have come on to the market and been killed at a smaller size and weight. Therefore, we now need more calves. Incidentally, another question that the Joint Parliamentary Secretary is always asked is whether many calves are slaughtered prematurely after the subsidy is paid. This, again, is one of those questions to which we never have a reply.

If that is the case, why was not something done before? Why was not something done last year and the year before? The Scheme will do nothing about the temporary fall in output. We can see from the figures that it will adjust itself, but this temporary fall in output is a condemnation of the Government's policy.

In the debate last year, the late Mr. Sidney Dye forcibly called the Government's attention to this, as he had done in 1956. The Joint Parliamentary Secretary replied that Mr. Dye exaggerated about the fall in the imports of beef. He then went on to make this extraordinary statement: there is a steady increase in our home production."—[OFFICIAL REPORT, 17th July, 1958; Vol. 591, cc. 1570–1.] The White Paper, however, tells us that there has been a fall in output. It says, as we believe, that the fall is temporary. This evasion of the Parliamentary Secretary will not help us at all. It must be recognised that the Government have fallen down on beef production.

Let us consider whether Mr. Dye did, in fact, exaggerate. We now have the figures for the first five months of this year. There has been a serious fall in the import of beef this year notwithstanding the welcome and unexpected increase in the supplies from Australia. The Joint Parliamentary Secretary rather played down the prospect of a fall in supplies from the Argentine. There has been a drastic fall in those supplies. We are getting 40 per cent, less than we were last year.

Let us consider home production, of which the Parliamentary Secretary said that there is a steady increase. Home production is substantially down on last year—in fact, it is 56,000 tons down. The Government have some responsibility for this. If the Joint Parliamentary Secretary, as he has done on previous occasions, takes the responsibility for the level of our beef production, he has so contrived things that we have a temporary shortfall on home production at the same time as we have this drastic fall in imports.

This has affected the housewife who buys beef, and for this the Government are largely responsible. It will not be affected by the present Scheme, under which we are considering what we are doing, with the long-term policy in view. The Government are responsible for the position obtaining now. They said twelve months ago that there was no case for increasing the amount of the subsidy. Now they come to the House when we are suffering the effects of the temporary shortage and too late wish to increase the subsidy.

The second fundamental question is whether, in the circumstances I have described, the increase in the subsidy of £14 million is wise, whether it will be effective and is necessary, and whether, in particular, the increase is appropriate. I quite understand Whitehall saying, when confronted with a prospective shortage of beef, "Let us increase the calf subsidy". That is the automatic thing to do. I once said to the then Minister of Food, "If you deal with eggs, have a word with the grocer". In the same way, when we are dealing with fatstock we might have a word with those who are responsible for the trade.

What is the purpose of the present marketing arrangements and deficiency payments? It is that production shall have the full stimulus of marketing conditions. That is why the Government introduced the scheme of deficiency payments. The position that obtains today is that the stimulus ought to be there because of the marketing mechanism. If the Joint Parliamentary Secretary consulted a butcher he would know that we have higher retail prices than we have ever had, that they increased substantially last year and have increased considerably this year. Why cannot we rely upon the marketing mechanism to attract the increased production? If we cannot, we had better examine the present price mechanism for fatstock.

If we merely put in an injection at this stage of the production cycle we are getting the worst of both worlds. We have high retail prices. I imagine that very little is being paid by way of deficiency payments, so there is very little Exchequer responsibility there. We are getting the high price of beef in the shops, yet the taxpayer is being called upon at the same time to make this increased calf subsidy at an early stage of the production cycle. This is quite apart from the general point I have made that in any case the temporary shortage is being dealt with and we know that the calves are now growing up into beef.

We can discuss this dispassionately, because this is a part of the overall annual Price Review determination; but even so, we have to question very seriously whether this production grant is justified in running up to more than £14 million. Let us consider briefly the grounds of the subsidy. First, we are told that it is making financial aid available at an early stage. If that is argued, we ought to pay attention to the steps which the F.M.C. has taken in making advance payments. This is a far wider question. We are avoiding the major question if we merely go on every few years increasing this subsidy.

What is the further argument made for the subsidy? It is that it helps the small farmer. We now happen to have a scheme to help the small farmer. Would it not be wiser to think of better ways of using the subsidy directly within the Small Farmer Scheme than to allow this subsidy to mount year after year?

The argument that this is a necessary incentive to increased production seems to be belied in present circumstances by the market conditions. With this drastic shortfall in imported supplies, with this temporary shortfall in home production, with market prices rising, with retail prices higher than ever before, surely the market ought to encourage increased production without this aid at the taxpayers' expense. If not, we had better inquire into the way in which the market works, to see why the producer is not getting the benefit and what conditions are necessary to ensure that the benefit goes to the produced. If he is not receiving the benefit, the producer has an absolutely valid claim to ask why this has not happened.

This is a matter we can consider dispassionately. It does not affect the Annual Price Review. It is within that determination, and what the House is entitled to be concerned about is that we are making the most effective use of the money going in production grants and this particular production grant. We have to satisfy ourselves that the money we are using is concentrated on the most effective forms of production grant.

Recognising that this comes within the Price Review, we would not think of opposing this Scheme, but I hope that the Joint Parliamentary Secretary will face the question that arises on the Scheme. I hope that he will regard this seriously and not just fall into the lazy habits of his Departmental advisers by saying that because there is a calf subsidy, and because the Government are guilty of bad planning about beef production, the answer is merely automatically to increase the subsidy every two years or so.

These are fundamental, if difficult, questions and I hope that before we consider the subsidy again this matter will have serious consideration by the Government and that both they and producers will keep under constant review the necessity of making the very best use they can of the production grants.

10.33 p.m.

Sir John Barlow (Middleton and Prestwich)

I listened with very great interest to the speech of the hon. Member for Sunderland, North (Mr. Willey), with some of which I agreed. I should be much more convinced, however, if he had a greater farming following behind him on the Opposition benches. So far as I can see, there is a complete absence of farming following there, which is not very good in view of the comparatively crowded benches on this side of the House.

The speech of my hon. Friend the Joint Parliamentary Secretary was reminiscent of his speeches on this subject for the last several years. He changes a few figures, but the arguments—with which I do not entirely agree—seem to be exactly the same and do not carry any more weight with me than they did previously when I and others questioned them. One bone of contention I have mentioned before is the question of Friesian heifer calves becoming eligible for the subsidy. We know that certain heifer calves will receive the small differential subsidy, but I can see no logical reason why, if, for example, dairy shorthorn and other similar calves are reared and have the subsidy, the Friesian heifers should not have it also.

It has been shown more and more in recent years that there is a great demand for Friesian beef. We know that it is a different type and does not fill the same market as the Aberdeen Angus and the Hereford, but in some parts of the country butchers and the public require lean meat rather than the fat meat which they used to like before the war. It is said that because mechanisation is taking the place of hard labour in industry, people today require less fat and that if they like fat they get it from vegetable rather than animal sources. For that reason, as is well known, in many of the important markets of this country the demand for lean beef has increased enormously.

As that is so, I suggest that Friesian heifer calves should be eligible for this subsidy. I remember that some years ago when I put this suggestion to the Joint Parliamentary Secretary he said that so many Friesian heifers or Friesian types would come forward that the Government could not afford it as there was insufficient money to go round. He said that in any case a large number of the heifers were going to dairy herds. If that is so, I suggest that we should cut out the subsidy for heifers altogether and give it exclusively to steer calves. I hope that my hon. Friend will consider that again and at least give me a better answer than that which he gave me when I raised the matter previously.

I support the hon. Member for Sunderland, North in what he said about the dehorning of calves. Those who work among stock know only too well the damage done by animals horning each other. If the subsidy were given only for dehorned young stock it would clearly cost the Government a little less. It would mean a great improvement in the stock filling the bullock yards in the country. Here again, the Joint Parliamentary Secretary's answer in the past has not been convincing. This is a case in which he could make a great improvement at no cost to the Government and perhaps with a saving of money. I hope that he will consider it.

I should like to comment on the choice of 1st April as the all-important date which decides whether a farmer receives the higher or the lower subsidy. It is the worst possible time of the year. Why should the farmers and those dealing with calves have to bow down to the magic day of 1st April, which has been dictated by the Treasury? It encourages an enormous amount of fiddling, and many fanners know very little about that in any case. I suggest that the Minister select some date when calving is at its minimum. It would be very much fairer and far better for the farmer who wanted to be completely honest. There must be very many calves in respect of which the higher subsidy is paid when they have no right to it, and vice versa, according to the way in which they are reared.

This subsidy is costing the taxpayer a lot of money. It is an excellent thing to encourage the rearing of calves, but I am critical of the way in which the money is being used.

10.39 p.m.

Sir Archer Baldwin (Leominster)

I had not intended to take part in the debate but I must comment on the suggestion that the Government should encourage the dehorning of calves. If the dealers who buy our store cattle want dehorned cattle, it is up to them to pay a little more in the store market for dehorned or polled cattle than they pay for those with horns. They need no Government assistance. In fact, that is taking place already. The number of store cattle coming into the market without their horns, either through breeding or by polling, is increasing because producers have found that they receive a reward for bringing the cattle into the yards without horns. We do not need to be taught our job in this respect by the Government.

I want to say a word about the amount of money that goes into the calf subsidy. I have never been in favour of giving various sums to the farmers in the process of production. I have always been in favour of giving it in the end price, to the man who produces the goods. Certifying calves is a very expensive job. It lends itself, as my hon. Friend just said, to a certain amount of abuse. I could not tell whether a steer calf had been born on 1st April or 1st June. It would be a very clever man who could tell. Therefore, I hope that these shots in the arm will be done away with and that we shall get the end price and reward those who produce. It would probably cost the Government a little less money.

I am speaking against my own interest by pointing out that at the present time I get a subsidy on all my pedigree heifer calves which I have no intention of putting into the market until they are cows. Therefore, if the end price were given it would do away with a certain amount of subsidy paid for heifer calves. My hon. Friend spoke about the Freisian heifer calf. I would say that one which was born to produce milk should not be given a subsidy for the production of beef at a later date. It does not seem to be consistent.

One word about the amount of the subsidy. The hon. Member for Sunderland. North (Mr. Willey) said that the subsidy was costing the taxpayer £14 million which was equal to what was being spent on the cotton industry. I would remind the hon. Gentleman that this money is being paid as a subsidy to the farmer so that the cotton workers and other workers can have their food a little cheaper than anywhere else in the world. Therefore, do not let it be thought that the farmer is getting something to which he is not entitled. Is he expected to feed the people at less than the cost of production? That is what it would mean if he did not receive the subsidy. I would rather see him get the end price than the subsidy.

10.42 p.m.

Mr. Godber

Perhaps I could respond to some of the points made during the debate and to some of the somewhat numerous questions put to me by the hon. Member for Sunderland, North (Mr. Willey). I must say to the hon. Gentleman that I was somewhat surprised at one or two of the criticisms which he made, and I shall seek to show, I hope, that some of them were not wholly well-founded. Indeed, I think that my hon. Friend the Member for Leominster (Sir A. Baldwin) dealt conclusively with at least one of the hon. Gentleman's points. I do not think that there is any need for me to go into the comparison of the value of the subsidy compared with what goes to the cotton industry. My hon. Friend was absolutely right when he said that the subsidy was directed to producing more food at a reasonable price.

Mr. Willey

The reason I called attention to the size of the subsidy was in order to call attention to the fact that we are here dealing with a considerable sum and that, therefore, the burden is on the House to see that we make the best use of it. It all comes into the Price Review—the determination. We must see that we make the most effective use of the money with which we aid agriculture.

Mr. Godber

I am grateful to the hon. Gentleman for making clear to us what was in his mind in that regard. I do not think it necessary for me to deal with the matter further.

The hon. Gentleman, and my hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) also, mentioned the question of the date on which this was introduced and chided me with the fact that it was not a good date at all in the calf-rearing year. It was the earliest possible date from the time of the Price Review having been completed. I think it would have been wrong to try to introduce anything of a retrospective nature. It is always frowned upon in the House. Therefore, the only alternative would be to bring the date considerably forward. That would have had the effect of depriving a very considerable number of farmers of increased subsidy this year. We were not willing to do that.

Another point that appears to have escaped both hon. Members who have referred to it is that while it certainly may work in this way when the subsidy goes up, if it were to be reduced in any year it would be a different matter. Presumably, the arguments that have been used so forcefully on this occasion would be equally valid in the opposite direction, if the subsidy were reduced.

The hon. Member also asked about dehorned calves, a point very well dealt with by my hon. Friend the Member for Leominster. It is right and reasonable that if people prefer dehorned calves they should be willing, as my hon. Friend said, to pay for the difference in the market when they buy their stores. That is what is happening, and I do not see that there is any incentive to the Government to limit this subsidy to dehorned calves. It is much better to leave it to the good judgment of the producers, as we seek to do now.

The hon. Member also thought that we were doing little about progeny testing. He must know that the Milk Marketing Board is doing a great deal in this direction. The Board is being very active over this testing, but this is a very long-term measure, particularly for cattle with such a long life cycle, and it is unreasonable to expect either us or the Milk Marketing Board to give any conclusive figures in the very near future.

The hon. Member asked whether any animals were prematurely slaughtered after the subsidy is paid. I imagine that he is thinking of very forward veal calves. I do not think there is any great likelihood of this, and I certainly have no evidence of it. The animals will not attract the subsidy until they are getting on for a year old in most cases, and most veal calves are killed before that age. I do not know of any great number of animals carrying the subsidy that do not go on for sale as fat beef.

The hon. Gentleman's main criticism was that we have been producing insufficient beef in recent months to meet the need, following a fall in supplies from the Argentine. He quoted me as saying last year that there would be a steady increase in home production. I stand by that, and I shall seek to show him why. As I have just said, beef production is a long-term business. I have some rather interesting figures here of the number of calves in the United Kingdom in each year at 4th June. The figures go back over the last ten years or more, and the interesting point is that they reached their lowest point in 1952, after rising in the earlier post-war years.

I am sure that the hon. Gentleman is aware that his own Government did away with the calf subsidy—completely eliminated it—just as they went out of office. We resurrected it, but the loss of confidence resulting from the Labour Government's action in 1951 is reflected in the 1952 figures. We reached a total of only just over two million in 1952, but by 1954 we had got it up to 2¼ million. Last year, the latest for which we have figures, we had raised the total to over 2½ million.

That steady rise shows that we are building up supplies of beef, but it takes three years from the initiation stages—if I may so term it—before getting the finished article, and it takes a considerable time to overtake any backlog. In this case we have also had to deal with the fact that, as the hon. Gentleman himself mentioned, the practice of killing at a younger age has had its effect. A year ago, or a little more, it brought in a lot of beef, but we have now had a flattening out in production. However, with the largish quantity of calves coming forward now it is reasonable to expect a larger number for killing in the latter part of the year. I believe that we shall gradually be able to improve in this way.

The hon. Member also referred to the fall in the supplies of Argentine beef, but it is fair to remind the House that Australian beef has been coming forward in larger quantities this year, and the total supplies of meat to the public have been comparable because there has been a great deal more mutton and lamb available this year. I do not think anyone could complain that there has been any acute shortage of meat.

Although the hon. Member may say that prices of beef are higher in some respects than they have been in the past, I would remind him that the overall price of meat is not greatly higher. Indeed, the cost of living is steady and stable, and has been so for twelve months, and shows every prospect of going down, as a result of sound government. Therefore, the hon. Member should not try to make too much of the point which he was pursuing in this respect.

My hon. Friend the Member for Middleton and Prestwich asked me a question about Friesian heifer calves. I understand his feelings and those of others interested in this breed, that they would like Friesian heifer calves included in the Scheme, but I would point out that this is a beef subsidy, and neither he nor anyone else can deny that at least three-quarters of the Friesian heifers go into the dairy herds. I cannot bring myself to think that it is right for us to be subsidising, in order to obtain beef, such a large number of heifers which go into the dairy herds.

My hon. Friend may say, as indeed I think he did, that we ought to take the subsidy away from all heifers, but there are difficulties there. It is rather hard to argue that some of the purely beef breeds should lose their subsidy for this reason. This is a difficult question, I agree, but up to the present we have felt that it would be wrong to change this system either one way or the other. I think that, generally speaking, the farming community accept it as being a fair solution to a rather difficult problem. Certainly I am sure they accept that it is not in the interests of beef production suddenly to subsidise a very large number of heifers which will find their way into the dairy herds. For those reasons, we have found it necessary to continue the system. Of course, the new Scheme which we are asking the House to approve widens the differential between the subsidy for steers and heifers, and to that extent it should go some little way to satisfy my hon. Friend.

I have tried to deal with the various points which have been raised. I assure the House that we take careful note of these points as they are raised. I am grateful to the hon. Member for Sunder-land, North for the assiduity with which he studied my previous speeches.

The Joint Under-Secretary of State for Scotland (Lord John Hope)

Or acidity.

Mr. Godber

Perhaps in the case of the hon. Member for Sunderland, North the two terms are synonymous. I am grateful to the House for the general response to this Scheme, and I hope hon. Members will approve it.

Question put and agreed to.

Resolved, That the Calf Subsidies (England and Wales and Northern Ireland) (Variation) Scheme, 1959, a draft of which was laid before this House on 5th May, be approved.

Calf Subsidies (Scotland) (Variation) Scheme, 1959 [draft laid before the House, 5th May], approved.—[Lord John Hope.]