§ 10.47 p.m.
§ The Minister of State, Board of Trade (Sir Keith Joseph)
I beg to move,That the Hops (Import Regulation) Order, 1961 (S.I., 1961, No. 2251), dated 22nd November, 1961, a copy of which was laid before this House on 28th November, be approved.The purpose of this Order is to ensure the maintenance of arrangements for the orderly marketing of hops. The Order is made under Section 43 of the Agricultural Marketing Act, 1958.
778 In this case, before making an Order my right hon. Friend must be satisfied on three things. First, that steps have been, or are being, taken to secure the efficient reorganisation of the industry in this country, and that its efficient organisation would be jeopardised if imports were not regulated. Secondly, he must be satisfied that the interests of consumers and manufacturers are not prejudiced by the Order. Thirdly, that the Government's international obligations are not breached by the Order. My right hon. Friend is so satisfied.
A substantial amount of capital is needed for the growing of hops. I am told that they the plants take about three years to mature, so the growers cannot respond flexibly and quickly to changes in the world marketing situation. The industry, therefore, is vulnerable if left unprotected to changes in the world supply position, and during the whole of this century there have been violent fluctations in the world supply of hops, and of the price of them.
In the first thirty years of this century the industry used to be buffeted by violent changes in the price from year to year, and by violent disruptive pressures from outside this country. As a result of this pressure, in 1932 the marketing scheme for the growing and selling of hops was set up under the Agricultural Marketing Act, 1931, and this scheme is working well to this day.
It has continued to provide the consumers of this country with hops at prices which have varied only relatively little since then, despite the most violent fluctuations in supplying countries, and I give as an example two successive years in West Germany when the price of hops varied from £8 to £110 per cwt. Our hop growers have been insulated against these sort of pressures and their prices have stayed at between £27 and £35 per cwt. Of course, as a corollary to this marketing scheme at home under the Agricultural Marketing Act, some import control was essential to insulate the home market from these fluctuations.
In 1934, the then Minister of Agriculture set up a Committee, whose Report was presented to Parliament, and in that year an agreement was entered into between the Hops Marketing Board and the Brewers' Association. These two bodies agreed to restrict imports of 779 English-type hops, except in those years when the home supplies were inadequate and to allow imports in limited quantities of lager and other speciality types of hops which cannot be produced here. These voluntary arrangements—which were on that occasion blessed by the then Minister of Agriculture—have been approved by successive Governments since then. The import control has worked satisfactorily since 1934 and has provided the British hop industry with reasonable supplies so that it has been able to provide stable prices for the hops the brewers require for these special varieties of beer.
The hop growers will need insulation in the future and, in the light of the Restrictive Trade Practices Act, a proper scheme now requires Parliamentary sanction. Hence this Order. Under the Order, licensing will be undertaken by the Board of Trade in consultation with the Permanent Joint Hops Committee, which is a body with a chairman and two members nominated by the Minister of Agriculture, with its membership divided between the Hops Marketing Board and the Brewers' Association. Thus its membership is representative half of the supplies and half of the consumers.
Licences will be issued within a quota approved by my right hon. Friend, but any application will be granted whether or not the applicant is a member of any particular society, body or organisation, provided he holds a contract from a brewer saying that the brewer requires his hops. It is not envisaged in the immediate future that the overall quota will vary materially from that which operated previously—and at 31st September last it was set at 8,000 cwt. Because of the shortage of hops on the home market, licences are at the moment being given outside the quota. Normally, when there is not a condition of shortage, the quota will be used mainly for the importing of hops suitable for lager and other speciality beers for which English home-grown hops are not appropriate.
The licensing arrangements should not interfere with the normal pattern of imports, which come mainly from West Germany, Yugoslavia, Czechoslovakia and Belgium. This is, in fact, only a 780 change in the method, and not in the substance. The procedure for securing supplies of hops will not endanger the stability of home hop growers and marketing will be continued by the statutory method.
The purpose remains the same. The substance remains the same. The effect on the public and the foreign suppliers is unaltered. Only the procedure is altered and I hope that the House will approve the Order.
§ 10.54 p.m.
§ Mr. Douglas Jay (Battersea, North)
I gather that the necessity for this Order arises out of the Restrictive Trade Practices Act. I am puzzled about this, because the Act became law, I think, in 1956, or 1957, and I do not quite understand why, when the old arrangements have been proceeding for four or five years, it suddenly becomes necessary to make this change now.
The hon. Gentleman's words were that in the light of the Restrictive Trade Practices legislation it was proper that this scheme should have parliamentary sanction. What did he mean by that? Did he mean if we do not legislate by this Order tonight the Government and the various growers and traders have been doing, they might not have been doing? Perhaps he meant that in the view of the Government it was illegal under the Act or that, perhaps, it amounted to an agreement which should have been registered under the Act. If so, is there any reason why the hon. Gentleman should not say so clearly and let us know what has been the legal position of this scheme during the four or five years since the Act came into operation? Secondly, the Minister said that in the absence of an arrangement of this kind—I do not question this fact at all—there would be what he described as probably violent fluctuations in price. Although this scheme might be justified, are we to infer that were we not to adopt the scheme of regulation, the price of hops would be lower? In the opinion of the Government would that affect the price of beer, since he has said that the hops produced here are used for the purpose of manufacturing beer. Can he say, for instance, whether, when there were violent fluctuations downwards in the price of hops, that reflected itself in the price of beer? Are we justified or not 781 in taking a decision which may make the price of beer higher than it otherwise would be?
§ 10.56 p.m.
§ Mr. John Wells (Maidstone)
I am grateful to my hon. Friend the Minister of State for giving such a clear and concise history of this Order and all that went before it before the Hops Marketing Board came into being in 1932.
The essential in British hop marketing today is stability. I was delighted that my hon. Friend used that word two or three times in his remarks, because the stability which we enjoy in the hop producing industry is essential to the horticultural interests of six counties. The whole hop growing and hop marketing industry is complex. It is faced with great difficulties such as the disease known as "wilt", about which I shall not bore the House tonight, but which is a great problem to horticulturists. Violent fluctuations in price were most alarming in the past. Countries of the Common Market are suffering from such fluctuations and they look at our orderly and excellent hop marketing with considerable envy. I expect that at a later date they may copy our system.
In the content of a pint of beer the value of the hops, in round figures, is about ¼d. The right hon. Member for Battersea. North (Mr. Jay) asked whether, if there was any great fluctuation in the price of hops, the price of beer would go up or down. It cannot make very much odds in a farthing either way. By innuendo, the right hon. Member also asked whether there were any alternative uses for hops. There is none except as manure. That virtually means giving away hops. They are at such a low price for manure as to be almost worthless.
I am very glad to welcome this Order because I feel that it puts the matter on to a more permanent and satisfactory basis. In particular, having welcomed the stability which it will give, I welcome paragraph 2 (2), which shows the flexibility of the Order. We are not legislating for all time, but it can be altered conveniently as need arises. I have one slight doubt in my mind. With improving conditions of storage, the hop crop can now be kept from year to year. Hops cannot be kept for much longer than a year, but they can be kept from 782 one season to another. That is very helpful to growers and to the marketing organisation, whose great aim is stability, but, as we are discussing imports and the restriction thereof, could we do more to further our exports? Our imports come from a certain set pattern of countries which provide special hops for lager and that type of beer, but we have special exports to Australia, Malta and various Commonwealth countries. Might that not be expanded to give the hop and horticultural industry help in one of its few protective stays?
Our horticulturists are at present looking out on the world with very troubled minds. Those who are growing hops enjoy this great stability, but I wonder whether we could set up an export industry. Siam springs to my mind. It takes its hops from Germany at the moment. I wonder whether something could be done about exports. If it could our horticulturists would have even more than this excellent Order to protect them. I welcome the Order, but I hope that further support can be given to this very efficient industry.
§ 11.0 p.m.
§ Mr. Tom Driberg (Barking)
The hon. Member for Maidstone (Mr. J. Wells), in an extremely well-informed speech, made one remark which I found rather disquieting. He referred to the Common Market, and to the apparently rather chaotic conditions of hop marketing in the Common Market countries, of which I was not aware, since, like most other hon. Members, I do not know in such detail all the things he knows about hopping.
§ Mr. Driberg
I realise that, and it is a very fine activity, in which thousands of Cockneys indulge every year, in Kent. It is hard work, but a very enjoyable atmosphere is created in the hop gardens, as I know well. Perhaps I should not have used the word in relation to an hon. Member and, if so, I am sorry I did.
I wanted to ask the Minister, quite seriously, what effect the adherence of this country to the Common Market would have on our stable hop industry and on this Order. Would the Order be 783 superseded by the Treaty of Rome, if that is not putting it too simply? I am sure the hon. Member can enlighten us on that point.
Secondly, some references, which were a little obscure to me, were made to lager beer, both in the Minister's speech and in that of the hon. Member for Maidstone. I was very glad to hear the Minister say that a good many years ago the brewers had agreed that lager beer could not be satisfactorily manufactured in this country. Although they no longer take that view, I still believe it to be the case. I wondered whether the Minister could enlighten us further about that. Does he agree with the brewers, who now think—wrongly, in my opinion—that British lager beer is drinkable?
§ Mr. Speaker
Order. The ingenuity, if not the taste, of the hon. Member goes a little too far from matters arising from the Order.
§ Mr. Driberg
With the greatest respect, Mr. Speaker, I hope that you are not querying my taste in beer.
I conclude by asking the Minister one question. Can he assure the House that there has been full consultation about this Order with the brewing industry, with which, as is well known, his party has such close, friendly and lucrative associations?
§ 11.4 p.m.
§ Mr. John Mackie (Enfield, East)
I recently had the great pleasure of seeing a hop processing establishment in Bermondsey. I take an interest in hops, as I have several friends who are hop growers. Recently, I thought of making an offer for a farm which had a hop quota. The price that I would have had to pay for that quota rather indicated to me that the Hops Marketing Board was a rather closed shop and made the hop quota a very valuable asset to the farmer.
Earlier, we were discussing butter and anti-dumping measures. There is one point which I should like to take up with the Minister. He said that over a period of years, the Hops Marketing Board had controlled the price of hops at between £27 and £35 per ton.
§ Mr. Mackie
I beg pardon.
Then, the Minister said that in countries from which hops were imported, the price varied from £8 to £110 per cwt. I should like to be assured that, because we have a hops marketing scheme, there will be no harmful effect against the producer.
A lot of people can drink 16 pints of beer on a Saturday night, and we have been told that the cost of the hops in a pint of beer is id. This has a considerable bearing on what people spend on Saturday nights during the course of a year. I should like to think that no control would be exercised that would affect the possibility of buying hops from abroad as cheaply as possible. I should like the Minister's assurance that there will be no question of increasing the price of hops to suit the wishes of the Marketing Board, which would have an adverse effect against those who produce our best lagers.
§ 11.7 p.m.
§ Sir K. Joseph
The right hon. Member for Battersea, North (Mr. Jay) asked me about the implications of the effect of the Restrictive Trade Practices Act. As he and the House know, there is a requirement under that Act that agreements of various sorts should be registered. The voluntary agreement controlling the import of hops was subject to registration. One of the effects of the Act has been to operate by way of precedent. All sorts of industries have observed the judgments of the Court and have drawn conclusions from those judgments about the judgment that would be likely—but not certain—from the Court if their own agreement eventually came before the Court. Here we have an example.
The agreement was registered, as it was bound to be. Advice was taken, and in the light of the decisions of the Court the parties to the agreement thought it probable that if it came before the Court, it would be found to be a restrictive trade practice. In anticipation of this, the parties and the Government have sought to avoid an interregnum during which the existing voluntary protection for the hop growers would have lapsed if the agreement had 785 been found to contravene the Restrictive Trade Practices Act before Parliament could step in and restore some sort of protection to the industry. That is why I said that in the light of the Act, the Order was being brought forward now.
Without any regulation of imports, prices might certainly be lower in some years and much higher in other years. As was said by my hon. Friend the Member for Maidstone (Mr. J. Wells), whose speech and comments as an expert I heartily welcomed, the hops ingredient in a pint of beer accounts for about d, while the Government's, or the taxpayers', ingredient accounts for about 8d.
§ Sir K. Joseph
That shows the relative importance of the one against the other.
The hon. Member for Barking (Mr. Driberg), who, as I hope to show, has struck unlucky several times this evening, asked whether my right hon. Friend had consulted the brewers before introducing the Order. The brewers might, however, like to have freedom to import hops from all over the world at any time. That would enable them in certain years to buy their hops cheaper than they can get them from the home market. The wiser brewers would realise the value to them of a stable hop production at home, but I imagine that some brewers would rather not have the Order and would prefer freedom to roam abroad to buy hops where they were cheapest.
I hope the House will bear in mind that we are dealing here with another party as well as the producer and the consumer. We are dealing with the worker as well. I asked experts how many workers were engaged in what is now a stable hops industry. I was told that it was impossible to say and that in these days it was part of wider farm activity. But I was told that there were more than 10,000, perhaps up to 13,000, workers who are in some way or other connected with hop production. Thus, their livelihood, in part at least, is protected by this voluntary agreement at the moment and will continue to be so if the House approves this Order.
I cannot possibly answer the inquiries of the hon. Member for Barking about 786 the Common Market. There are so many uncertainties about it, particularly in agriculture, that it is impossible to predict. I have never committed myself to the judgment that British brewers cannot brew good lagers. What I did say was that they cannot use British hops to do so. Most of the imported quota will be for lager and special quality beer.
§ Sir K. Joseph
This Order is about hops, not water.
My hon. Fried the Member for Maidstone made a valuable point about the importance of increasing exports that was music to my ears. But we do export hops at the moment. Our largest export is to the Republic of Ireland—a point which is of particular interest tonight. We should like to see more exports, and I hope that exports to the Continent and, indeed, to other parts of the world will grow. I hope that, with this explanation, the House will approve the Order.
§ Question put and agreed to.
That the Hops (Import Regulation) Order, 1961 (S.I., 1961, No. 2251), dated 22nd November 1961, a copy of which was laid before this House on 28th November, be approved.