BUTTER (ANTI-DUMPING DUTY) (Hansard, 14 December 1961)

§ The Minister of State, Board of Trade (Sir Keith Joseph)
I beg to move, That the Anti-Dumping Duty Order, 1961 (S.I., 1961 No. 2255), dated 23rd November, 1961, a copy of which was laid before this House on 28th November, be approved. This Order imposes an anti-dumping duty of £10 5s. per cwt. on butter originating in the Irish Republic. This Order has been applied to the Republic of Ireland by my right hon. Friend with the very greatest regret, but I would remind the House of the situation that has caused him to take this action. The House will recall that there has been during the whole of this year a considerable pressure of butter supplies dumped or subsidised on the United Kingdom market and this pressure has caused considerable concern to our suppliers, and especially to New Zealand, the largest supplier of our butter.
Consequently, New Zealand and Denmark applied for anti-dumping duties on butter imported into the United Kingdom from several countries. Her Majesty's Government, realising that this pressure came from the aggregate of the butter sent to us from a number of different countries, thought that the proper solution to aim at was a voluntary scheme of self-restraint between a number of these supplying countries. Therefore, Her Majesty's Government proposed a meeting of the supplying countries under the G.A.T.T. at Geneva.
The meeting was duly convened and we made it clear in seeking such a meeting that, failing an agreement, we should have urgently to consider the action sought by New Zealand and Denmark under the anti-dumping laws. At the meeting a programme to limit butter shipments for a period of six months from 1st October this year, to provide a breathing space during which a long-term solution could be sought, was proposed. As the House is aware, no agreement was arrived at. Consequently, my right hon. Friend's Department had to consider New Zealand's application for duties under the Customs Duties (Dumping and Subsidies) Act, 1957. My right hon. Friend 766 reached the conclusion that dumped and subsidised butter imported into Britain threatened material injury to the New Zealand dairy industry and he therefore decided that action should be taken.
However, even having decided that that action should be taken, the British Government thought that the proper, fair and reasonable course to relieve the pressure on the British market would be to try to achieve a voluntary restraint by the supplying countries. All the main supplying countries were therefore asked to accept the programme of shipments which had been proposed during the G.A.T.T. talks at Geneva, but the Government made it abundantly clear that they would have to take action under the Customs Duties (Dumping and Subsidies) Act on any imports of butter from any country which was not prepared to co-operate in voluntary restraint.
As the House will remember, as a result of this approach arrangements to limit shipments as suggested were made by every one of the other countries concerned, but to our great regret the Irish Republic could not feel able to agree to restrict exports to the quantity proposed. In fairness to the other countries concerned, we had to act as we said we would, and on 23rd November an Order was made laying anti-dumping duty on butter from the Irish Republic.

§ Mr. Hector Hughes (Aberdeen. North)
The Minister has singled out the Republic of Ireland as against a number of other nations. He has indicated that he was successful in his negotiations with the other nations but not with the Government of the Republic of Ireland. Will he specify the attempts he made to come to an agreement with the Republic of Ireland? What aspects of the agreement were successful and what were not? Why, ultimately, was the agreement not arrived at?

§ Sir K. Joseph
The Republic of Ireland was, of course, represented at the September conference at Geneva and therefore knew all along about the proposals for voluntary restraint. There then followed a stage during which my right hon. Friend had to study the application by New Zealand for the use 767 of the anti-dumping procedure. During all this time, the Government of the Republic of Ireland knew that the problem was still very much alive.
Once my right hon. Friend had decided that the case was made out, he approached the various countries that were putting butter into our market and which had been concerned at the Geneva conference, and sought their co-operation in carrying out the agreement in the new situation in which dumping had been found to be going on. Therefore, the Government of the Republic of Ireland had been conscious since September both of the problem and of the likely outcome if dumping were to be established and of the solution which the Government would propose.
The actual proposal to the Republic, as one of the supplying countries, to apply voluntary restraint was with the Government of the Republic for about a month. Towards the end of that month, a high-powered deputation from Ireland came to London and conducted talks with Ministers here.
There can be no question that the Republic was given no warning of what was in mind. It had plenty of time to consider this. We greatly regret that it did not avail itself of the quota that was made available to it by the G.A.T.T. proposal. The proposal was that it should be empowered to supply 4,000 tons of butter and it is of its own doing that it is not availing itself of that quota. The other countries approached are taking up their quotas within the voluntary restraint proposed.

§ Mr. Hector Hughes
The hon. Gentleman has not given me the details I asked for. It is all very well to say that the Government of the Republic of Ireland knew of the conference and did not attend it and later sent someone to London to discuss the matter with the British Government.

§ Mr. Deputy-Speaker (Major Sir William Anstruther-Gray)
Order. It would not be proper to conduct this debate by way of question and answer. Hon. Members are entitled to make one speech each. The Minister can reply more than once, but there can be only one speech for each hon. Member. We are not in Committee stage.

§ Mr. Hector Hughes
I am not making a speech, Mr. Deputy-Speaker. I am prefacing what I want to ask by some statement which would lead up to the question. My question is: will the Minister state specifically what aspects of the topic were agreed between the two Governments and what were not agreed? What are still outstanding which prevent complete agreement?

§ Sir K. Joseph
The only point outstanding is whether or not the Republic of Ireland will accept a quota. No other issue is at stake. It has had the opportunity to put 4,000 tons of butter into our market. It has, alas, refused that opportunity. I am not aware of any other issue outstanding between us.

§ Mr. John Mackie (Enfield, East)
I do not want to delay the House at this time of night. I do not like all-night sittings and I consider this hour reasonably late. We have heard a great deal about our shortage of foreign exchange and that we are a hard-up country. We can scarcely say that everybody eats butter. Many people eat margarine. We have not too much butter in the country. Will not the levying of £10 5s. 0d. a cwt. reduce the supply of butter to the people? Is not that wrong? The Government should not stay tied to not having controls. It would be much better to have cheap butter and balance out the price, as was done before the war with wheat.
We have to import many things and when other countries are offering them cheaply we should buy them as cheaply as we can. if that affects home producers, then a balance could be struck if the Government were able to accept some measure of control. Merely to try to keep out butter in order to keep up the price and thus keep butter away from the people of this country seems to be ridiculous.
I appeal to the Government to think a little more about the people of this country and a little less about their idea that prices should not be controlled, or that the system should be controlled by balancing out prices. I appeal to the Minister of State to give this matter a little more consideration and not to be concerned only with the G.A.T.T.

§ Mr. Douglas Jay (Battersea, North)
To avoid the Minister of State having to make too many speeches, I will ask him one or two questions before he replies to my hon. Friend the Member for Enfield, East (Mr. Mackie). Incidentally, I notice that, although the Government profess to find it impossible to exclude Irish immigrants, they have much less difficulty in placing restrictions on the supply of butter from Ireland.
I am not prepared to say that there are no circumstances in which it would be justifiable to levy anti-dumping duties—and I do not imagine that my hon. Friend the Member for Enfield, East is, and he knows more about farming than I do. But we have had an extremely meagre explanation from the Minister of State of the case for the imposition of these duties. After all, we are being asked to place a tax on a major foodstuff consumed by the people of this country. Other things being equal and without explanation, one would have thought that on the whole it was better to leave important foodstuffs untaxed, keeping the cost of living down, rather than to tax them. What effect will the Order have on the price of butter? The hon. Gentleman has told us nothing about that. What will be the effect of the whole operation of limiting the supply from other countries and placing this tax upon Irish butter? The hon. Gentleman has not told us and he has not told us what he expects to be the effect of this Order.
I have always understood that this anti-dumping legislation was to be brought into effect only when it had been shown that some commodity was being sold on the British market not merely cheaper than previously, or cheaper than the price at which the United Kingdom producers could manufacture it, but below the cost of production in the country of origin. I think that the Minister of State will agree that that is the basic principle of these duties. He gave us absolutely no evidence that that was so in this case. It may be so, but we would like to know. From which countries other than the Irish Republic—and presumably the Irish Republic is such a country—was butter being imported into this country and sold at prices below the cost of production in the original countries?
770 Was it being sold here at prices which were simply injurious to the New Zealand producer? I understand that that is a serious matter, and the Government are quite right to take that into account. Was it being sold at prices which were injurious to the United Kingdom producer as well? The hon. Gentleman did not tell us that, and, as he will agree, in this legislation it is necessary not merely to say that the commodity is being sold below the cost of production, but also that its sale is damaging to national interests. One would wish to know whether that is alleged. I do not know, but we ought to know whether it was damaging the producers in this country as well as those in New Zealand.
We have not been told what the reasons of the Irish Government were. The Minister may disagree with them, but one wonders why the Irish Government declined to make this voluntary agreement to limit its exports of butter as other countries were willing to do—and we do not know what the other countries were. Did the Irish Government accept the view of the British Government that it was dumping butter, in the accepted sense, or did it not agree the figures of its costs and prices and so on which, apparently, the British Government had accepted? Was there a dispute about the facts, or did the Irish Government simply say, "The facts are correct; we are selling our butter in your market extremely cheaply and below our costs of production, but"—for some reason—"we refuse to reach any voluntary agreement"? One would need to know that in order to be acquainted with the nature of the dispute with the Irish Republic, because the Minister did not explain that.
Finally, can the Minister say how long he expects this arrangement to last? Action has been taken by the Government which is clearly imposing a fairly major limitation on the supplies of butter to this country and which will presumably raise the price above the level at which the consumer would have been able to buy it. Is that arrangement to last for an indefinite period until he or someone else alters it? I suppose that the Order will remain in effect until the Government ask Parliament to revoke it. Or has the hon. Gentleman some 771 temporary, emergency arrangement in mind?
That is all I wanted to ask the Minister. If he wants more time to find out the answers, some of my hon. Friends may be able to add a few relevant words. I should be grateful if we could have that information before we approve the Order.

§ Sir K. Joseph
rose—

§ Mr. Deputy-Speaker
Mr. Driberg.

§ Mr. Tom Driberg (Barking)
While the Parliamentary Private Secretary is finding out the answers which the Minister does not know, I will fill in a few minutes in support of what has been said by right hon. and hon. Friends. As my right hon. Friend the Member for Battersea, North (Mr. Jay) said, the Minister's explanation has been so far exceedingly meagre. I wonder whether it is not because there is a rather shabby connection between this Order and the Commonwealth Immigrants Bill. We had references the other afternoon in Committee on that disgraceful Bill to the desirability—

§ Mr. Deputy-Speaker
Order. I hope that the hon. Member will not go further than this rather narrow question we are debating.

§ Mr. Driberg
No, indeed I will not, and I am grateful to you for reminding me of the necessity of not doing so.
I am venturing to suggest, though I hope the suggestion is misplaced, that this is perhaps a form of economic sanctions which the Government are applying to the Republic of Ireland in order to induce the Republic to accept the proposals with regard to the Commonwealth immigration which the Attorney-General the other afternoon said it was highly desirable that the Republic should accept. Again and again he said we hoped that the Republic of Ireland will prevent immigrants coming in; we can, of course, erect a fence around the United Kingdom; and so on. This Order, to which what I am saying is directly relevant, is part of the fence round the United Kingdom. This may be part of the economic sanctions by which the Government are trying to 772 enforce the restriction of immigration of the Republic of Ireland. Therefore, it may be that we shall have to resist this Order.
The second suspicion which crosses my mind, again directly relevantly to the Order is one which is excited by the remarks of my hon. Friend the Member for Enfield, East (Mr. Mackie), who pointed out that we have not too much butter in this country, that on the whole probably more people eat what some call "marjarine"—what purists like the Minister would probably call "margarine"—than eat butter.
Now if I may carry your mind back, Mr. Deputy-Speaker, without your calling me to order, to the Television Act, 1954, you will recall that, despite the strenuous opposition of such eminent supporters of the Government as the present Lord President of the Council and Minister for Science, that Measure was rushed and steamrollered through both Houses of Parliament as the result of the activities of a small group of back bench Members of this House on the Government side who were interested in advertising, in public relations, and promoting commercial television.

§ Mr. Deputy-Speaker
I am reluctant to interrupt the hon. Member if he really thinks he is in order, but I find it impossible to comprehend how he can be.

§ Mr. Driberg
I will do my best to enlighten you, Mr. Deputy-Speaker, with very great respect. If you are as frequent a watcher of television, including commercial television, as I am—and I think that from the nature of your duties you cannot be—you will realise that among the most frequent advertisers on commercial television are the margarine producers. One of them, indeed—which I will not mention by name—boasts that its product contains 10 per cent. of butter. This is supposed to be an asset, thus indicating how much better butter is than margarine.
A century ago it was probably true to say that the Conservative Party was the party which represented the rural interests of this country, the landed interests, the producers of butter, the dairy farmers and so on. In the last half century or more those interests have become much less predominant in the 773 Conservative Party. They have been replaced by various rather unsavoury big business interests like the importers of meat from Argentina. All those things have a much higher priority in the councils of the Conservative Party than the dairy farmers have. I am merely suggesting that the Government are introducing this Order perhaps—I hope the Minister will be able to deny it because I have some regard for the honour of Her Majesty's Government—because the commercial television and the margarine lobby is now much more powerful in the Conservative Party than the agricultural lobby.

§ Sir K. Joseph
I think I can answer together the points raised by the right hon. Member for Battersea, North (Mr. Jay) and of the hon. Member for Enfield, East (Mr. Mackie). I am sure that they and the House will agree that if it were left to my right hon. Friend the President of the Board of Trade and, indeed, to the Government's discretion to try to hold the balance between consumers' interests and suppliers' interests without any guidance from Parliament, it would be an extremely invidious and difficult task.
We have, on the one hand, the farming community of New Zealand and we have, on the other, the consumers in this country. But Parliament has laid down the circumstances in which the Government are required to consider any application for anti-dumping duties and the criteria which the Government pursue. They are laid down in the Customs Duties (Dumping and Subsidies) Act, 1957.
If I may dispose straight away of the cautious allegations of the hon. Member for Barking (Mr. Driberg), I would emphatically deny any connection whatsoever between these two pieces of legislation. Only let him realise—perhaps he did not realise it—that this whole use of the Customs Duties Act which has led to this Order is at the initiative of an injured, or a supposedly injured, party. This was only put into operation when an allegation was made in this case by New Zealand and Denmark. No initiative lay in this country in this instance, though an initiative might have laid with our own farmers. But the initiative in this case came from 774 New Zealand. I know the hon. Gentleman will be prompt to believe that the New Zealanders do not jump at our bidding, particularly when it comes to making an application for their own benefit. So I hope that I can dispose of any such thought in his mind.
Of course, any general restraint upon the arrival of butter in this market. such as has been achieved by the voluntary acceptance by a number of countries of the quota scheme proposed by the G.A.T.T. September meeting at our request, must have some influence on prices. Neither I nor anybody can distinguish what part of the effective prices is due to that voluntary restraint on the part of a large number of supplying countries with a massive total aggregate supply in the past few months, and, on the other hand, the influence of the very small or relatively small diminution of supplies from Ireland.
In fact, as a result of these influences and possibly of other influences, since other influences—though I cannot trace them—may come in, the price of butter has hardened in the last few weeks from about 260s. a cwt. to about 285s. a cwt. This is a moderately sad thing for the home consumer but, as I shall seek to point out, the home consumers' interests are best served by seeing that we get a regular supply of butter at reasonable prices year in and year out. That is what New Zealand has supplied to this country.

§ Mr. Jay
Can the hon. Gentleman tell us how much the price had previously fallen during the period of the alleged dumping?

§ Sir K. Joseph
I have not got the exact figure of fall, but it had come down to a figure of 250s., which had caused substantial injury to the New Zealand and, it was said by them, to the Danish farmers. That is what we are considering in this situation. I have not got in my mind the figures from which it had fallen.
As to harm being done to consumers in this country, butter is still much cheaper here than in any other country of Western Europe. It is about 80s. per cwt. cheaper now than it was at the end of rationing in 1954. These are encouraging facts which we should bear in mind.
775 The right hon. Gentleman asked for some details about the price in Ireland compared with the price at which Irish butter was being sold here. The wholesale price in Ireland was 465s. per cwt., and it was being sold here at about 260s. per cwt., and that is why the duty has been put at the difference between those two figures—205s.
The right hon. Gentleman also asked whether the dumping was damaging to our own producers. We must remember that our own producers supply only about 10 per cent. of our market. In fact, no application for anti-dumping duties came from our own farmers. My right hon. Friend can pay heed only to an applicant's case, and in this case the applicant was New Zealand.

§ Mr. Jay
And Denmark.

§ Sir K. Joseph
Yes, and Denmark; but, in fact, we took action on the New Zealand case since it presented us with a much fuller case than Denmark did and we were able to deal with the matter more quickly on the basis of the New Zealand application.
Three things have to be established before my right hon. Friend can apply anti-dumping duties. First, he has to be satisfied that there is dumping or subsidisation; and he was satisfied in this case that there was. Second, he has to be satisfied that there is material damage to an industry, and that industry can be either in this country or, in certain circumstances, in one of our supplying countries. In this case, it was material injury to an industry in one of our supplying countries, namely New Zealand, that my right hon. Friend found. Third, he must be satisfied that it is to the national interest of this country that anti-dumping duties shall be applied.
The national interest of this country was affected in two ways. First, it would be very sad for this country and the consumers here if the New Zealand butter industry, which has been our regular supplier year in year out for the vast bulk of our butter, were to be disrupted by wholesale dumping by other countries. That would be in mind. Second, we have to take into account the fact that New Zealand is a staunch friend and member of the Common- 776 wealth, and therefore, we pay particular attention to her interests.
The right hon. Gentleman asked me if I could penetrate the reasons why the Republic of Ireland had not fallen in, as the other countries had, with the quota proposals. Frankly, it is beyond me. I can only imagine that they naturally did not like the idea of curtailing their supplies to a quota level, particularly when they have been suppliers of this country for a long time, to some extent irregularly since the war, but now, of course, we are faced with new facts, and in the light of those new facts we have to take action. My right hon. Friend is extremely sorry that they have denied themselves of what the other countries have accepted, namely a market, even though a limited one, in this country.
I would remind the House that the 4,000 tons that the Republic of Ireland was offered, though not as much as the 10,000 tons it has delivered in the first part of this year, is more than the average tonnage it landed in this country during the four previous periods. It was by no means a small tonnage in comparison with its last supplies.
Finally, I was asked how long the Order would continue. It lasts until it is revoked by a Resolution under the negative procedure. I cannot really answer the question, because the whole purpose of the operation is to secure a breathing-space in which we can, if possible, secure international agreement to stop this sort of thing happening again, and we must see by the end of the six months' period where we are. So I cannot answer the last part of the question.

§ Mr. Mackie
The hon. Gentleman has not answered the question. Is this likely to decrease the supply of butter or to increase the price? Surely, it is possible to take advantage of our deepfreeze arrangements for butter and allied products in these circumstances, so that what he has said does not apply.

§ Sir K. Joseph
I have said that I cannot isolate one strand in the combination of factors, but I have said that the price of butter has gone up since voluntary restraint was applied and also since the anti-dumping duties were applied to the Republic of Ireland and its tonnage ceased to arrive here. There 777 may be other factors. The price has gone up. I do not believe that supplies are significantly restricted. The channels of supply for butter are perfectly adequate to fill in where they happen to be momentarily short.

§ Mr. Jay
I do not wish to pursue this too far, but the Minister did not answer one question I asked, which is, I think, relevant and factual. Apart from the Republic of Ireland, which other countries, in the opinion of the Government, were dumping butter here, and which have now apparently agreed voluntarily to restrict supplies?

§ Sir K. Joseph
The other countries which have voluntarily agreed to restrict supplies were set out in the Answer to a Question on 4th December. They are the Argentine, Finland, the Netherlands, Poland, South Africa, France, Norway, Sweden, and a very small element from others, including Kenya.

§ Mr. Driberg
Is it or is it not the case—since this is the inevitable consequence of this Order—that the Government want the public to eat more margarine and less butter?

§ Sir K. Joseph
I had hoped that the hon. Gentleman would have realised that no initiative lies in the hands of the Government in this. We respond to the application, which in this case came from New Zealand. What we do to each application is governed by Parliamentary procedure here.