FARM SUBSIDY SHOCK.

HC Deb 12 February 1962 vol 653 cc941-1043

The taxpayer, be it said, has no less cause for concern in that the payment of all this extra subsidy to compensate the farmer for low prices in the cattle market failed to cheapen the price of beef."

It goes on to state that However intricate the economics of the meat market, it looks, in the event, as if the public, in the role of taxpayer and consumer, is paying twice over for price-support policy.

The Farmers' Weekly, on 22nd December, 1961, in its editorial, commented: Missing Millions. But the really serious aspect of this business goes beyond what may happen at the Price Review. One thing stands out. The purpose of the farm subsidies is to keep down the price of food to the consumer. Here they have failed to do so.

It goes on to ask how the Minister can make up his mind and argues: They have not even got the December livestock returns in front of them…to say that the producers have had £31 million of it is easy enough, but it is an over-simplification which does not stand up to close examination…

We could go on arguing. We can only say, on the evidence outside, that even in the farming world and in the responsible political world which is sympathetic to the Government it is agreed that there has been a miscalculation and that, even though there may have been an increase in the deficiency payment, in the end the full benefit has not been passed on to the ordinary consumer. The evidence is there and I have carefully looked at the figures from those concerned in the industry.

Our argument is that here is a breakdown of a system. The Government's policy has failed. A deficiency payment system combined with a free market will inevitably produce the results we have witnessed. The Minister says, "I hope that this will not happen again". It will happen again, and the full responsibility must rest on the Minister and the Government. They created the free market and it was they who sought to undermine the main foundation of the 1947 Act and the organised marketing which we on this side of the Committee sought to introduce.

I remember the Prime Minister making a clarion call for a change in agricultural policy in November, 1953. He said: The House knows that it is our theme and policy to reduce controls and restrictions as much as possible and to reverse if not to abolish the tendency to State purchase and marketing which is a characteristic of the Socialist philosophy. We hope instead to develop individual enterprise founded in the main on the laws of supply and demand and to restore to the interchange of goods and services that variety, flexibility, ingenuity and incentive on which we believe the fertility and liveliness of economic life depend."—[OFFICIAL REPORT, 3rd November, 1953; Vol. 520, c. 26–7.] Hon. Members opposite do not believe that now. The astonishing thing is that the hon. Member for Kidderminster and others believed it then.

Parallel with that major announcement by the Prime Minister, we had in November, 1953, a White Paper on Decontrol and Food Marketing of Agricultural Produce, Cmd. 8989, which was confirmed by the then Minister of Agriculture, who said that the policy which would be introduced returned to the auctioneers, the wholesalers, and the butchers the freedom to buy and sell, and allows the housewives to express their choice through the prices struck in the market. At the same time it gives to the farmers the two things which are essential for the expansion and maintenance of production, namely, an adequate knowledge of the return to be expected from the sale of an animal, and a reasonable assurance that production of good quality animals will be duly rewarded."—[OFFICIAL REPORT, 9th November, 1953: Vol. 520, c. 629.]

This is surprising, in view of what has happened. The Government say, "Away with controls". Over and over again, we have asked them to do something about marketing and distribution and we have had crisis after crisis. This is nothing new. Hon. Members know very well that in 1958 the then Minister of Agriculture faced what was virtually a crisis over pigs. Too many pigs were produced. In February of that year guarantees were reduced and the rate of subsidy halved, from £40 million to £20 million, and the number of breeding sows was reduced from 700,000 to 600,000. There was a major crisis in the industry.

As I have said, we have pressed the Government time and again to do something about marketing. Here is an example. The Minister is now forced to accept the view that there must be a new approach to marketing. I have criticised the Estimates Committee. I think that the House of Commons should have been given more details and that the Government should have indicated their views on marketing. The Government should take the initiative. The Minister has been too complacent. At the Oxford Farming Conference on 8th January the Minister said that this was a matter solely for the industry. This was the view which the right hon. Gentleman also expressed when he launched the British Farm Produce Council some time ago, when he said: My predecessor, I know, has often preached on the importance of marketing. You will find that I am just as keen. But although the Government can give encouragement, it is, in the long run, only the industry that can achieve the result that we all desire. Up to now the Government have always argued that it is for the industry to take the initiative in marketing. We take a contrary view. We believe that the Government should initiate proposals to improve marketing and rationalise the distribution of meat and the processes from the farm gate right up to the retail shop.

Sir S. Summers

So that we may appreciate the constructive part of the hon. Member's speech, at which he has at last arrived, may I ask what he means by rationalising distribution?

Mr. Nabarro

The hon. Member for Workington (Mr. Peart) is going back to meat rationing. Eightpence a week.

Mr. Peart

I will give the hon. Member for Aylesbury a direct answer, and I hope that the hon. Member for Kidderminster will not be a political clown today but will be serious.

I have been asked a direct question. I give one example. There are today 3,400 slaughterhouses in the country and here there is a case for rationalisation. I know that the hon. Member for Aylesbury will have read the excellent article on meat policy in The Times last week. The Government appointed an Interdepartmental Committee to examine the matter. The Committee argued that there was need for moderate concentration. I do not know why hon. Members opposite complain. That was then part of Government policy.

We need more concentration of the abattoir system and this may well be one of the biggest items that will have to be considered by the proposed committee. [HON. MEMBERS: "Words."] Hon. Members may say "words", but the Government have issued a White Paper on the subject. In 1957, the then Parliamentary Secretary to the Ministry of Agriculture argued that it was not at that time Government policy to aim at moderate concentration. He argued that we should avoid central planning, and said: What I am saying is that the policy of moderate concentration by means of central planning is no longer the way in which we think we should work…We felt we should achieve the same end…by giving freedom to people, if they so wish, to invest in slaughterhouses."—[OFFICIAL REPORT, Standing Committee A, 28th November, 1957; c. 12.1] Rationalised distribution is an urgent necessity. The farmers themselves express this view. Hon. Members who represent farming constituencies know that marketing is one of the main preoccupations of most of the local branches of the National Farmers' Union. Farmers in West Cumberland are conducting a major survey on the subject. This is one of the matters which causes the greatest anxiety to the producers. If we are to do anything to give security to the producer and to bring benefits to the consumer, then, inevitably, there must be an organised market and there must be control. [HON. MEMBERS: "Oh."] Of course there must be rationalisation. Why not?

Mr. Fell

What I cannot understand is how rationalisation always leads to a situation where people are forced to buy cuts of meat which they do not want to eat.

Mr. Peart

It really is absolute nonsense to argue that if we improve distribution—if the hon. Member for Sunderland, South (Mr. P. Williams) will stand up, I will answer him.

Mr. Paul Williams (Sunderland, South)

The hon. Gentleman says that we should improve distribution. Who, the State?

Mr. Peart

Yes, the State—the Government acting for the State. After all, the Government represent the community, and here the Government have a responsibility.

Sir Peter Agnew (Worcestershire, South)

Will the hon. Gentleman make a little more clear what he means by "improving distribution"? Does he mean that at present there is not a full range of choice of meat and that housewives cannot buy the cuts they want, but that by some system he will alter that?

Mr. Peart

I think that the hon. Gentleman is really missing the whole point. If he were to attend a farmers' meeting and discuss——

Mr. Nabarro

My hon. Friend attends more meetings in a week than the hon. Gentleman does in a year.

Mr. Peart

I think that the hon. Member for Kidderminster is really being a silly fool today.

I have been asked to explain what I mean by rationalisation of distribution. I have given one example of where we have too many slaughterhouses and where there could be a concentration. We are arguing for organised marketing. After all, British agriculture has to compete with New Zealand, the Argentine and Denmark. In all those countries there is organised marketing. New Zealand sends us her lamb, the Argentine sends us her beef and Denmark sends us her bacon. All those countries have gone in for streamlined distribution. That is why we say that the Government have failed to take the initiative—they have failed to take the lead.

I came now to the Price Review. I ask the Minister what it will do. I have quoted a statement by the Minister in reply to a Question. Perhaps, one of the most serious aspects of the whole problem which we are discussing is its effect on the farm support policy and the harm which it could do to negotiations which are now taking place. Here is the difficulty. If I may, I will break down the figures quoted for 1961–62. If we take a figure of £350 million as the cost of Exchequer support, last year it was £265.6 million. If we assume that farm costs increased last year by £26 million on all products, that year £19 million was on Review commodities. This year it is expected that we shall have £20 million on all produots—£15 million on Review products.

As hon. Members know, the 1957 Act limits the cut which can take place. It can only be £29 million less than the total increased costs. This will inevitably mean, if we take the inflation figure of £15 million, a cut of only £14 million. This is a dilemma which the right hon. Gentleman faces in relation to the Review. I want to know what really is the Government's policy. What is the Government's attitude, in view of the recent White Paper issued by the Chancellor of the Exchequer? Are farm incomes to be considered in relation to general incomes as stated in the Chancellor's White Paper, because farm workers are involved? Will the Government seek to circumvent the provisions of the 1947 Act? The Farmer and Stock-breeder argues that there may be a switching from Exchequer support on individual commodities to production grants. I should like the Secretary of State to tell me what the Government are to do.

It has been seriously argued that there will be a switch away from Exchequer support on individual commodities to production grants and a measure of structural reform. This is a very serious aspect of the problem which we are discussing. I have always believed in a support policy. I believe that the broad support policy which we have witnessed under the 1947 Act and onwards has benefited the producer and the consumer. But that support policy is now under fire. We have seen how it has been criticised by leading industrialists, including the Chairman of I.C.I. They have criticised it from an industrial point of view. But here is a serious aspect of the problem which concerns many hon. Members.

The Minister has mentioned negotiations with the Common Market. I think that the hon. Member for Yarmouth (Mr. Fell) will agree with me in this sense, that the danger is that this miscalculation of the Minister, this breakdown of the deficiency payment system, linked with a free market, really weakens the whole support system in this country and that, inevitably, we shall be negotiating with the Brussels Powers from a position of weakness. That I think is the tragic situation which we now face.

Mr. John Eden (Bournemouth, West)

The hon. Gentleman has repeated the statement that this is a breakdown of the system. Given these peculiar circumstances and conditions, how else would he have expected the system to operate?

Mr. Peart

I have argued all through that the system has broken down and that a deficiency payment system with a free market will lead to this. Therefore, I am arguing that if we are to have a deficiency payment system we must have a controlled market and controlled distribution. Indeed, I assert that if we had still had a Labour Government in power at the time their main task from 1950–51 would have been to organise marketing in the interests of the producer and the consumer.

There is here a conflict of views and a difference of approach. I readily accept that hon. Members opposite believe that their system is right, but I maintain that it inevitably creates the conditions with which we are now faced. One of the tragedies, as I have shown, is that we are now having high-level negotiations with the Brussels Powers and that there is a danger that we shall be negotiating from a position of weakness. Indeed, the Minister admits that we face the prospect of making quite radical changes in our methods by which we support agriculture. That has been accepted by the Minister, and it was confirmed by the Prime Minister when the House discussed the wider issues of the negotiations with the Common Market countries.

Thus, we are entering a period when there may be major structural alterations. The Government's policy has put them into the position of negotiating from weakness. Events have become, in a sense, too big for the Ministers who are responsible. The right hon. Gentleman is a very worried and bewildered man. He hopes that he will get out of his difficulties through a European solution. I am certain that he believes that the answer to his problems is a European one. I do not argue that today, for we are not debating the Common Market, but I do say that the Government have been waiting for something to turn up in this field.

I am worried because this Government have undermined the 1947 Act over a long period. I am worried that they will now acquiesce in a European solution, that there will be a structural reform of our support system and that there will be another approach which could harm those policies which a Labour Minister of Agriculture pursued from 1945 to 1951.

The Deputy-Chairman (Sir Robert Grimston)

Order. I am sorry to interrupt the hon. Gentleman, but it is not possible now to pursue the question of legislation. The hon. Gentleman can skirt round the subject, but to go into detail would be out of order.

Mr. Peart

Exactly, Sir Robert. My argument is that the Government have harmed legislation over a long period. The Government have miscalculated. Their policy of deficiency payments in a free market has produced the result we are discussing today. They have failed to give a lead in marketing and in the rationalisation of distribution. They have destroyed confidence in our support system and have weakened the main provisions of the 1947 Act. They have refused to take action when asked to do so. They have always acted too late. In the end, they have harmed the wellbeing of the producers and have not benefited the general taxpayer and the consumer. The Government's agriculture policy has failed, and this Supplementary Estimate is the culmination of that failure.

5.13 p.m.

Sir John Gilmour (Fife, East)

In making a start at a speech in this Committee today, I crave the indulgence of right hon. and hon. Members for any errors which I may commit. I am sure that most people, when they come here, are sufficiently vain to feel some satisfaction, but, in my case, I definitely have a shadow on my arrival, because it was due to the death of a personal friend. Sir James Henderson-Stewart served the constituency of Fife, East for twenty-eight years and I know how much he is missed in the constituency. I have also come to know, since I have been a Member of the House, how much he was held in esteem by hon. Members on both sides.

I am lucky to represent a constituency which has both agriculture and a seat of learning—the town of St. Andrew's, with the oldest university in Scotland, and therefore I find it fortunate to be able to take part in this important debate. Because I am a practising farmer in my constituency, and because I, as a partner in a farming enterprise, am a recipient of some of the subsidies, no doubt it would be right for me to declare my interest.

I believe that we should certainly look at these long-term projects, but I do not think that it would be right for me today to enter into such a controversy. But I would like particularly to mention one or two matters in connection with beef and lamb, in which I am interested. First, I think that, in the Price Review negotiations that are taking place now, provision should be made to see that it is not possible for livestock which has been through an auction ring to go back on another occasion.

This is bound to have a depressing effect on the market and, as the deficiency payment is calculated on an average, I do not believe that it should be allowed to happen. I believe that the farming community would be with my right hon. Friend if he was to propose such a course.

Then, I think that we should try to make this guarantee system a little more flexible. I suggest that it should be possible for an alteration to be made in grading standards during the course of a fatstock year. After all, the present standard is a minimum of 54 per cent. The recent Smithfield Show was won by an animal graded at 62 per cent. which was judged to be the kind of better beast wanted. The average reached after the first grade was 57 to 58 per cent. During the last year, when too many cattle were coming on to the market, it might have been possible to raise the percentage from 54 to 56 per cent. A brake could have been put on the number of cattle coming forward and savings could have been made.

I know that it is easy to have hindsight, but I doubt whether it was wise to put on the whole of the 10s. increase in one fell swoop last year. I understand from the Report of the Estimates Committee that it was done to stimulate production in 1962–63, in which case surely the increase could have been put on gradually or put on halfway through the fatstock year.

There is no doubt that the high rate of subsidy attracts cattle on to the market, and we should face up to the fact that the farmer is just as well off, if not better off, if he receives £5 a cwt. from the auctioneers and £3 from the Government, on Which he pays no commission. Human nature being what it is, this high rate of subsidy encourages too many cattle on to the market.

In addition, we should face up to the fact that consumption of beef has fallen since pre-war days by about 7 lb. per head. If we are to look after the beef livestock farmers, we must stimulate that demand. Another factor to be borne in mind is that about 20 per cent. of all money spent on food is spent on pre-packed and ready-to-eat food which needs the minimum of cooking by the housewives. Therefore, it is in the interest of the beef producers to try to stimulate demand. I think that the extra 10s. which they get has aggravated the Irish immigration problem. In this case, as far as I am concerned, I would favour black immigrants. This has put up the cost of store cattle, adding to the capital which the feeding farmer has invested, and, therefore, I am doubtful whether it has been in the interests of the farming community as a whole.

Then there is the question of lambs. In a year of plenty, why not reduce the maximum weight on which a subsidy is payable? We know that the average weight of New Zealand lambs is between 29 lb. and 35 lb. A period of high subsidy means that the farmer gets a bigger return from the subsidy than from the auction prices, and he tends to keep his lambs to a greater weight, putting more meat, on to the market, and again aggravating the situation. Some flexibility might be given by a new effort to reduce the maximum weight of about 55 lb. in this country—compared with about 35 lb. in New Zealand—to 40 lb. to 50 lb. That is producing the type of mutton which, in many cases, is not of the best quality, or exactly what is wanted.

I draw attention to an article in the Pastoral Review, an Australian magazine which, in its "United Kingdom Meat Notes", on 18th August, 1961, drew attention to the importance of packaging and self-service and said: This business of self-service in Great Britain has wider implications…Already, New Zealand meat exporters are examining and even practising pre-packing at source. and it is estimated that this year they will produce about 1 million lambs in this way. The system has two main advantages: It provides big economies in freightage and it facilitates the disposal of cuts not in demand in U.K. to other sources. In a recent contract, for example, it was reported that from lamb carcases the legs came to the U.K., the loins went to U.S.A., the shoulders to Canada, the breasts to Ghana and the shanks to Honolulu. There may be scope for that kind of outlet for some of the cuts which we do not want, if we so organise ourselves. At the same time, we should realise what a great competitor against lamb is the broiler chicken which, I gather, is now being sold in a quantity equivalent to about 8 million lamb carcases per annum. Unless we organise ourselves on these lines, we will not be doing the best far agriculture.

Having made those few suggestions, which, I hope, may be of some use to the Committee, I return to the main item, which is this very large bill. It is its magnitude which stresses its utmost necessity. Had the system not been available, livestock farmers would have been ruined by last summer's prices. That is why I say that the magnitude of the bill underlines its need.

My right hon. Friend stressed the weather aspect of this problem. I ask hon. Members to think what it must be like, on a night like this, to be a hill shepherd on the side of a hill with a lambing flock. We have a bounden duty, particularly in a world which is now very much working a five-day week, to safeguard the standard of living and interests and livelihood of those who give unsparing attention to livestock on our farms year in and year out.

In Scotland, one person in six lives on a farm and the interest of the agricultural community is paramount. The economy of Scotland is bound up with farming, and I therefore welcome the Government's assurance that the guarantee system will continue.

5.23 p.m.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

I congratulate the hon. Member for Fife, East (Sir J. Gilmour) on his maiden speech. I have personal reasons for doing so, in that at one time he was my opponent in an election. He was then inclined to claim that he was an even better Socialist than I, but, having listened to his speech today, we can all agree that he approaches this problem in a much wiser and more thoughtful way than that shown by many of the hon. Members opposite who were interrupting my hon. Friend the Member for Workington (Mr. Peart) a few minutes ago. I congratulate him on his constructive and critical speech. He did not rise to proclaim himself a "yes-man" of the Government, whatever they did. He introduced much wisdom from his own experience and knowledge and the Government would be wise to take note of many of his suggestions.

As he said, he has followed a very distinguished Member of Parliament. Sir James Henderson-Stewart was elected about twenty-eight years ago, when I happened to be the election agent of his Labour opponent. Because of that, I had a long and intimate connection with him and his work in the House of Commons, even until the day he passed away. Hon. Members recognised him as a very hard worker. We did not always agree with his politics, but we realised that as a Minister he did his job most effectively. We were a little surprised when he disappeared from the Government Front Bench during a Government reshuffle.

I have another reason for congratulating the hon. Member which he was too modest to mention himself. He succeeds another distinguished Member of Parliament, his revered father, who was Secretary of State for Scotland and played a very important part in the development of our constitution. He had the reputation and credit of having carried through one of the important reforms of the constitution which took to Scotland the administration of Scottish affairs, which had previously been situate in London. That was a tremendous step forward towards satisfying the Scots, for at least they realised that they were being given some control over their affairs and were not being administered by people who did not understand them. We pay tribute to the hon. Member as succeeding his father and bringing back to the House of Commons a name which carried great distinction and great honour among the Scots for the part he had played in that work.

I congratulate the Minister on his wonderful feat of memory. He is following General de Gaulle and the former Minister of Health in being able to speak without notes, giving the most complicated sets of figures, in spite of interruptions. That was a remarkable feat which reminded me of the late William Graham, who used to do that with Budget debates and impress every hon. Member.

My hon. Friend the Member for Workington expressed his disappointment that we had not heard from the Secretary of State for Scotland. However, I understand that we are to hear from him later. Perhaps hon. Members do not sufficiently recognise his modesty and timidity about forcing himself on the attention of the Committee. He is like Burns's Wee modest crimson-tipped flow'r. He tends to give the impression of shrinking from any activity which arouses interest in him or in what he is doing. Perhaps that is best in some ways because the less there is said, the less there is trouble for him.

What is worrying me about these support prices and the Supplementary Estimate is not the fact that there is a Supplementary Estimate. I am concerned that there appears to be no control behind it. It seems to me haphazard and the Government appear to have no idea of what is happening. The Minister spent nearly an hour trying to explain what it was all about, a kind of post-mortem examination.

In principle we have no objection to supporting agriculture in this way. The trouble is that in the form in which it appears before the public it gives the appearance of the Government being a kind of "sugar daddy" to the farmers, handing out millions of £s without any purpose or policy. People think that all the money goes to the farmers. That is wrong and it would clearly be a mistake for anyone to give a suggestion that that is what happens.

Many years ago, the Labour Party formed an agricultural policy, not because it thought that it could get the votes of the farmers—there was no hope of that because we all know that farmers will always vote for the Tories, no matter what is done to them—but because farmers have to live and we had laid down the principle that the man who produced the wealth of the world was entitled to an adequate reward for so doing. If we were to lay down a national policy, even though the farmers voted Tory, we could hardly leave them out. The purpose of our policy was to carry into effect the principle that we want to maintain our agricultural population. To do so we must enable them to live decently if they are doing their jobs efficiently.

We also wanted to reduce our dependence on foreign suppliers for meat and other products, which had grown up out of two world wars. We cannot look forward in, any future war to farmers playing the wonderful part they did in the last two wars.

After the First World War agriculture was thrown to the wind, and today there is a kind of wind of change blowing with a frosty nip which the farmers may feel if the weather does not improve fairly soon. We want to reduce our dependence on foreign suppliers as much as possible, and to consume as much of our produce as we can, especially as it is such good produce if we are talking about Scots meat. We also want to ensure regular supplies of feeding stuffs for our animals and food for our people. This is clearly a policy which can be carried out only by the Government.

Those who this afternoon have been sneering at the Government and Government control do not seem to recognise that the farming industry has been nationalised for many years—though the farmers do not know it. All that has happened is that the Government have farmed out their responsibilities. The agricultural policy of 1947–48 was laid down to establish a partnership between landowners, farmers and the Government for the maintenance of the agricultural industry and the production of as much food as possible at the cheapest possible price to the consumer. We cannot produce all the meat and food that we need. Half of it has to be bought abroad. Sometimes food can be bought more cheaply abroad than in this country, and therefore the free market is an impossibility if we want to maintain a proper agricultural population here. I challenge any hon. Gentleman to show how a free market could make possible the farming community that we have in this country and enable it to live.

We know what happened between the two wars. People had to live on the land by bleeding it of its fertility, and the land got poorer and poorer. At the beginning of the last war the land was in a state of poverty. The first thing that we had to do after the war was to invest £300 million to revitalise it and stock it with cattle and livestock. Hon. Gentlemen opposite sneer about the groundnuts scheme. They should bear in mind that the sum spent on that scheme was a mere bagatelle compared with the money invested to provide people in this country with food.

The results have amply justified that policy, because the Government are now claiming that wonderful results have been achieved. For instance, 57 per cent. more milk is produced and the yield per cow has risen. Our policy was aimed not only at quantity but at improving productivity by subsidising science and making available to the farmer every kind of knowledge to enable him to produce more milk. As I said, production has risen by 57 per cent. and the yield per cow has risen from 540 to 620 gallons per annum. In addition, there has been an 8 per cent. increase in the production of eggs, and on average hens lay 182 eggs annually compared with 149 before the war. We now produce 57 per cent. more pig meat, and our net output is up by between 70 and 80 per cent.

All that has been achieved because the Government acted in partnership with the farming community. They invested £300 million to enable stocks to be built up and to enable the land to be refertilised. We supplied fertilisers free and we enabled the hill sheep-farmer to rebuild his property by giving him the price of his farm buildings. In short, we improved the capacity of the farmer to produce more in this country.

Mr. J. A. Stodart (Edinburgh, West)

As a matter of interest, and to enable me to know how I was left out of this, will the right hon. Gentleman tell me what fertilisers were supplied free to which farmers?

Mr. Woodburn

The hon. Gentleman is entitled to the ploughing subsidy, the lime subsidy, and the fertiliser subsidy. If he does not get them, he must have missed the boat.

Mr. Stodart

With respect, that is not the same as saying that fertilisers are supplied free.

Mr. Woodburn

The part which the hon. Gentleman gets for nothing is free.

The hon. Gentleman has raised an interesting point, because the Government today face a similar problem to that which we faced. We were trying to help the farmers who needed help but the trouble was that we could never help those who needed it without giving fortunes to those who did not. The wealthy farmer like the hon. Member for Edinburgh, West (Mr. Stodart), who ranks among the aristocracy in the farming world, gets the benefit just as does a poorer farmer, and the efficient farmer always gets a bigger rake-off from the subsidy than does the inefficient farmer, or one who is working on poor land. As a matter of fact, most people would regard farmers in East Fife as having something wrong with their heads if they could not make a living off the farms up there because they work on some of the finest soil in this country, if not in the world.

This brings the Secretary of State far Scotland up against a tremendous problem, because when one talks in terms of an average farm consisting of 70 acres, one has to remember that half the farms in Scotland consist of less than 50 acres. The problem is how to help only the man with 50 acres. Again, these farms vary in quality to such an extent that one cannot say that two farms next door to each other are of comparable quality. The problem of supporting farming is extremely complicated, and I have a certain amount of sympathy with the Government in their efforts to tackle this problem.

We do not want to subsidise inefficiency. If the money is handed out without any test, it might lead to a dangerous situation. The Government did away with the country agriculture committees and left the farming communities to measure efficiency themselves. The discipline that used to exist has gone by the board. One agricultural committee in an important area wanted power to deal with people who were sitting an some of the best land in Scotland and who, because they did not know how to use the land, were misusing it. The committee wanted power to make such people make proper use of the land they had.

The greater part of Scotland is in the Highlands and uplands, and this land could be improved tremendously. If we go into the Common Market, are all these farmers to be thrown to the wolves? Is Scotland to go back to the wilds? We have never been told what is to happen about these farmers. We have approved legislation to help the crofters, and we are told that the auctioneering system for the sale of their produce is the best. The trouble is that when these people bring their cattle down from the hills they take a gamble, because the price they get depends on whether they arrive at the beginning or at the end of the auction. It may be said that this works out all right on the average, with the ups and downs sorting themselves out eventually, but the problem is that many of these people do not have enough cattle to get an average price. It takes them years to reach the average, and they might have been in the red all the time and never have got an advantageous price.

If a man produces a high-class carcase he should receive the proper price for it. It should not depend on his chance in the market.

Mr. Marcus Kimball (Gainsborough)

He does get the proper price. That is exactly what happens.

Mr. Woodburn

If he brings his cattle into an auction and happens to get there just at the end of the auction he may not receive very much. I am talking now of store cattle.

Mr. W. Baxter

The situation is just the same wth fat cattle. A man can bring his fat cattle into the market and receive £8 per cwt., and another man coming in when everybody is away at lunch may get only £5 a cwt. But each man receives the same subsidy from the Government. My right hon. Friend is quite correct. There is no guarantee of price; the only guarantee is the amount of subsidy.

Mr. Woodburn

I am glad to hear that the Government are going to set up a committee. I hope that it will be a genuine one, and not merely a "pushover" for today's debate, as someone has suggested. If it is a genuine committee I hope that it will go into this question thoroughly. The I.C.I. and other large companies can fix prices for their products, and if a farmer produces something for the stock market he should be able to get the price of his labour and a proper reward for his efforts.

Even with my experience of this problem I cannot say that I can produce a ready-made solution. I know that there are many complications. We did away with the auctioneers, but that increased the costs of administration, and other things. Nevertheless, the problem needs to be solved, so that the men who do the job can at least receive a fair reward.

This is a vital industry—and not only for the big farmer. If the support system has to be changed in the near future, as is possible, we must consider the problem of the small farmer. I do not want to see the uplands of Wales, the Surrey Downs and the Highlands depopulated. It is important to keep people on the land, and we must make some sacrifices to do that. A support system must therefore be designed to make that policy effective. It need not be inefficient. It has been shown by simple experiment that large areas of the uplands can be brought to a condition in which they will carry three times the amount of stock that they are carrying at present. The Secretary of State has been carrying on experiments in Lewis, and I hope that they will be developed much further.

It would be a mistake, however, to think that all farmers are full of energy and drive, and want to make their land as profitable as possible. Some of them are prepared to sit down and smoke, or wander about like a "stick-and-a-dog" farmer. It is not necessary to subsidise such persons unless they can show that they can produce results. Under the Secretary of State's housing legislation people must produce justification for a subsidy, and we ought to be able to ask some of these farmers to justify the payment of subsidies to them. They should prove that they are doing their job efficiently for the nation, as its agent on the land.

I am surprised that the Minister did not produce a better balance sheet for agriculture today. We want to know its effect on our balance of payments. I do not regard the money that we are paying to our farmers as going down the drain; much of it still exists in the form of better stock and a better condition of the land, besides a better heart in the industry. I understand that but for our agricultural industry we should have to import another £400 million worth of food from abroad. My figure may not be correct, but the Minister should provide us with a proper balance sheet.

I am sorry that the Government interfered with the 1947 Act by taking away some of its planning provisions without replacing it with something else. We must have a proper pattern for the agricultural industry, which will fit into our economy. If we remove part of the pattern we leave a gap. We must either plan or not plan. This kind of half-planning by the Government has got them, and the country, into no end of trouble. The public have the impression that the Government are giving handouts to the farmers and others, while they must continue to pay the same prices as before. The Government should show that they know what they are doing, and have a grip on the situation.

When they bring forward a further plan, which I hope will be in the near future, it should be of a comprehensive nature, which will be of benefit to the whole country—the farmers and the public. The public are entitled to know what is being done with their money. They must not think that the money is being thrown about recklessly, as would appear from the Minister's statement.

5.47 p.m.

Sir Spencer Summers (Aylesbury)

I hope that it will not be thought unseemly of me if I address myself to the Supplementary Estimate rather than the wellbeing of farming as a whole. If I understood the right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) correctly, his view was that there should be some kind of test of the performance of a farmer before deficiency payments are made to him. I do not know whether I am interpreting the right hon. Member's point of view correctly, but I am certain that any such scheme would be lamentable. We would have to have a series of committees all over the country, judging whether or not the deficiency payments due to certain farmers, on their figures, should be paid. It would be impracticable, and unacceptable to farmers generally.

Mr. Woodburn

Is the hon. Member suggesting that we should give money to farmers, or anybody else, without asking any questions?

Sir S. Summers

I suggest that it is quite impracticable to have the sort of test of efficiency which the right hon. Gentleman has put forward. I am sure that the farming community would agree with me.

The hon. Member for Workington (Mr. Peart) permitted himself a number of remarkable contradictions. He complimented the Estimates Committee—and I was Chairman of the SubCommittee—on what it had to say, but then went on to accuse the Government of a gross miscalculation. The essence of the Report is contained in the last words of paragraph 21, which makes it quite plain that this Supplementary Estimate is in no way due to a gross miscalculation but is, on the other hand, inherent in the Agriculture Acts which have been passed since the war, because there is no limit to the market price in this situation.

He talked about the system having broken down. The system has not broken down. There is a very grave misunderstanding, which has a bearing on the responsibility of the Estimates Committee, with which I will deal in a moment. There seems to be a view that we are here debating whether the retail price of meat, as affected by the deficiency payment system, should or should not have been lower than it was last year. The retail price of meat has nothing whatever to do with the deficiency payment by which the prosperity of farmers is assured.

Mr. Charles Loughlin (Gloucestershire, West)

It has an indirect bearing.

Sir S. Summers

The comments which I detect from hon. Members opposite simply confirm what I am saying—that there is a grave misunderstanding about this whole matter. Whether the retail price follows the wholesale price down or not, there are certain deficiency payments due to farmers—quite irrespective of what happens to the retail price. It is completely to misunderstand the situation to argue that because retail prices, it is said, have not gone down as much as it is thought they should have gone down, therefore the system is at fault and the farmer ought not to receive all the dues which otherwise would go to him.

Mr. James H. Hoy (Edinburgh, Leith)

My hon. Friend the Member for Workington (Mr. Peart) said nothing of the kind. My hon. Friend dealt with paragraph 20 of the Committee's Report on the relationship between wholesale and retail prices. He pointed out that the Ministerial evidence was to the effect that there has not been the reductions in the price of meat which might have been expected. Indeed, the concluding sentence of that paragraph of the hon. Member's own Committee reads: Your Committee are concerned that this process has, in the opinion of the Department, operated so ineffectively. That was the point to which my hon. Friend directed his remarks.

Sir S. Summers

I am not concerned only with what was said by the hon. Member for Workington. I am also concerned with what other hon. Members opposite have said. All along there has been the implication that there is something wrong with the way in which farmers' remuneration is arrived at if criticism can be levelled at the retail price of food. The two are completely separate and distinct. The retail price has no bearing whatever on the deficiency payments to farmers.

This brings me to the criticism arising out of that intervention that the Estimates Committee should have gone to more trouble to find out what were the effects on retail prices, implying that, even at the expense of time, the Committee should have taken further evidence from the meat trade and should not have contented itself only with hearing from the Ministry. The reason that these charges are made is that it was hoped that from the Select Committee's investigation that support would come for hon. Members opposite in their criticism of the retail prices situation.

It is precisely because this has nothing whatever to do with deficiency payments, except to a very limited degree to which I shall refer, that it would have been quite wrong for the Estimates Committee to go out of bounds, so to speak, and to go into the question of retail prices and to find out what has been happening there. There is only one very limited aspect of that part of the subject which is relevant to the Supplementary Estimates—namely, whether a further fall in the retail prices would have corrected the situation, would have brought about greater demand and pushed up the wholesale price and thus have reduced the deficiency payment. It is solely that aspect of the question which has any relevance today, and it would be a great mistake to assume that the Select Committee failed in its duty to examine more fully that aspect of the subject.

I welcome the comments made by my hon. Friend the Member for Fife, East (Sir J. Gilmour) in what, if I may say so without impertinence, was a very remarkable maiden speech. I want to refer to his comments on the need for elasticity in implementing that policy which the Government are pledged to continue throughout the lifetime of this Parliament. I should have expressed it differently, but we reach exactly the same end. It seems to me that under the present system, by which certain prices are assured, the element of quantity is ignored, and that if there are more potatoes, more lambs or more cattle, that is solely for the farmers' benefit and has no mitigating effect, so to speak, on the calculations of the sums which are due under the deficiency payment system. In the assured price for pigs, for example, there is a mitigating calculation related to the price of feeding stuffs so that if the cost of producing pigs is reduced because the price of imported feeding stuffs falls, there is smaller need for public support of that part of the industry. The calculations take account of that.

May I point out the example of what happens with potatoes? Here I speak with a vested interest as a modest grower of potatoes. The farmer gets it both ways. First of all, if he has a heavy yield he has the advantage of more tons to sell, but by having more tons for sale he also attracts the Ministry's support buying policy, which seeks to make sure that the price does not fall to such a level that farmers attract an inordinate degree of deficiency payment. In other words, the market price is supported at a time when there are plenty of potatoes for sale, which means that the farmer has not only the benefit of the supported price but the benefit of more tons for sale at that supported price. By and large, the same may be said about lambs. There is a fixed price at which the farmer may sell his lambs. If he has a very large number of lambs, as was the case this year, not only does he get the advantage of the assured price but no discount is provided for quan- tity, when I should have thought it reasonable to do so.

I should like my right hon. Friend to clarify one point. The Minister made a very interesting calculation, one of many—and we admired his capacity to make them without a single note. He said that we produced £1,300 million of meat a year. He calculated in terms of millions the benefit to the taxpayer and the consumers of a 4 per cent. reduction in price. Does that grand total include broilers as well as the items of meat in the Supplementary Estimate?

Mr. Soames

It refers not only to broilers but to all meat from all sources—not just carcase meat but all meat, both from this country and imported.

Sir S. Summers

If that is the case, I am sorry, because it means that the calculation takes into account types of meat—for example, broilers—with which we are not concerned in the Supplementary Estimate.

Sir Leslie Plummer (Deptford)

We are.

Sir S. Summers

There is no deficiency payment for broilers.

Sir L. Plummer

What the hon. Member overlooks is that 350,000 tons of broilers came on to the market in this period. This was in competition with carcase meat and had a direct effect on the subsidy.

Sir S. Summers

The hon. Member has not overlooked anything of the kind. That was no surprise; it was known when the prices were fixed in the Price Review last February that a large quantity of broilers would be coming on to the market. It has not been overlooked in the slightest. All I am saying is that in the Supplementary Estimate no deficiency payment is required in respect of broilers.

I promised to be brief, and I will make only one further observation: I hope that nobody will assume that because it has become necessary, for reasons advanced by the Minister, to ask Parliament for a Supplementary Estimate for £78 million, therefore the system as it affects the farmer—I am not talking about marketing and the Committee to look into marketing—is under fire. Assurances were given in the first place that the price would be made up to the producer from the market price. Nothing has happened in the last twelve months to suggest that in present conditions that system is in any need of alteration. It is only the impact of the Common Market, whether we are in it or not, which prompts a change in the system in the future—not what has happened in the last twelve months.

6.0 p.m.

Mr. John Mackie (Enfield, East)

First and foremost, like others who have spoken, I congratulate the Minister on his excellent performance without notes. It is a pity that he did not have a better case to put.

I should like also to refer to the suggestion made by the hon. Member for Fife, East (Sir J. Gilmour) about cattle coming on to the market a second time. I hope that nobody thinks that this is done to any extent or that a second subsidy is obtained. Farmers are simply taking a commercial gamble, and I am surprised that hon. Members opposite should be opposed to a commercial gamble.

Mr. Loughlin

While there is no direct evidence, there has been some worthwhile information to the effect that livestock is sold twice and a double subsidy obtained.

Mr. Mackie

In that case, it is a matter for the Director of Public Prosecutions.

The hon. Member for Aylesbury (Sir S. Summers) said that the system has not broken down. We have heard continuously that the Agriculture Act, 1947, is designed not only for the farmers but for the benefit of the whole country, and that subsidies are not only to help the farmer but to ensure the provision of cheap food for the consumer. We have heard that meat has not come down in price. If that is so, the system has broken down, and that is the case that we on this side of the Committee are making.

The hon. Member also referred to the remarks made by my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) about tests of efficiency. There is a perfectly good test of efficiency which is run by many of the hon. Gentleman's friends in Hampshire and in Wiltshire. There is the Hampshire Growmore Club. I do not know that any of its members supports this side of the Committee, but they have a perfectly good efficiency test which can easily be applied. I was sorry that the Minister did not have a good case, because he fell heir to this problem, and I do not think he will have much help from his party to solve it.

Let us consider the problem of the extra £67 million for fatstock. We all agree that the purpose of this money was to uphold the guarantee, and we also agree that it was paid direct to the farmers, though there has been a suggestion that some of it was paid to the consumers. I think we all agree on the figure of £31 million which was created by the increase in the amount of stock coming on to the market. The figure in question is the remaining £36 million.

Here I should like to take to task the former Chairman of the Estimates Sub-Committee, who said that there was not time to consider any further evidence. Between the time that the Supplementary Estimates were produced and now, there has been any amount of time for every conceivable lobby to come to the House, and I am sure they would have been delighted to appear in front of the Estimates Sub-Committee.

However, we have had discussions with butchers, farmers, housewives and economists, and frankly it has not got us very far. It has been a fascinating exercise, but I am beginning to wonder whether it is not all rather pointless, because the main argument concerns the breakdown of this system.

A Scots economist working in Glasgow University has produced some interesting figures affecting Scotland. They reveal a rise in butchers' margins of from 28 per cent. to 39 per cent.—a very sharp rise of 11 per cent.—an overall rise of 33⅓ per cent. in distributors' margins. That seems too much. The Minister had suggested that prices had dropped by 5½ per cent., now corrected to about 4 per cent. I consulted a person in a nationalised industry and he told me that over nine months to the end of September his figures showed only a 2 per cent. drop. That was on a fairly large buying job. Another firm said that it had experienced a drop of 17½ per cent. in retail prices. That is 3s. 6d. in the £ or 1s. 9d. in 10s.

We should not be guessing. I am sure there are figures in the Ministry of Labour and in the Minister's own Department, where we could get those particulars.

Mr. W. Baxter

Is it not conceivable that we could have consulted our wives to ascertain whether there has been a reduction in the price of butcher's meat? I have asked my wife haw much butcher's meat has been reduced in price and she tells me that it has been reduced very little, if at all. There is no need to consult any larger authority than our wives.

Mr. Mackie

My hon. Friend has anticipated the next part of my speech. Having failed to get official figures, and having got all these differences, I thought the best thing would be to ask some housewives. There is no doubt that housewives are not good buyers. I have consulted any number of housewives and they do not agree that there is any reduction. I have also consulted butchers and they say that it is amazing how few housewives ask the price of a lb. of beef. I thought that I would consult my own butcher. I was told that last year the price of sirloin was 5s. a lb. and that this year it is 2d. dearer. That surprised me, and next time I go to Scotland I propose to look into this matter.

The suggestion that cheaper cuts are obtainable in Scotland cannot be right. If it were, it would be a reflection on the people of Scotland and would suggest that they are not so well off and cannot buy the good meat and that the dear cuts go to England.

It looks as if the advantage to the consumer has not been much more than 2 per cent. to 2½ per cent. That produces a figure of £14 million, leaving £21 million to be accounted for somewhere on the distributive side. I do not know whether it is on the wholesale or retail side, but looking at the figures which I have obtained and studied, that seems to be the amount which is unaccounted for.

I should like to return to the main point, that the system is not working and never will. A deficiency payment system with no marketing system and no import control will not work. As has been said, it is nothing but a blank cheque to the Minister of Agriculture, Fisheries and Food. If guarantees were reduced the result could be the same. On the other hand, if they were increased it could mean less. The Minister must speculate all along the line, and I do not think that that is the answer.

Regarding subsidies paid to farmers, I gathered some figures last weekend concerning one of my farming enterprises and found that on a fairly large acreage over the last year the subsidy averaged out at about £9 an acre. That is not a large figure, because 400 or 500 acres are given over to the production of dried grass which carries no subsidy at all except for the fertiliser. And any farmer will know that lucerne grass needs only potash fertiliser, which, of course, is not subsidised. Thus the picture is not completely true and the figure of £9 is indeed a low one.

This figure covered the production of potatoes, sugar beet, cereals, fertiliser grants, lime, grassland, ploughing and farm improvement grants. That figure of £9 is interesting, because the farm in question was producing 200,000 gallons of milk but the subsidy figure for milk was only 8s. 6d. an acre. If he had been in beef it would have worked out—on the basis of how many fat cattle would have been produced by the food used in the production of that milk—that he would have produced 400 bullocks, and the average subsidy today stands at over £20 per bullock. That would have increased his subsidy by another £4 an acre at least.

The Chairman of the Milk Marketing Board has been asking the east of England farmers to give up milk and go in for beef; also the Minister wants to reduce the production of milk. I do not understand it. Why should he wish to curtail the production of milk when we import £6.7 millions of milk produce—dried and tinned—£106 million worth of butter and £31 million worth of cheese?

As long as the taxpayers only guarantee a standard quantity the milk is handled by the Milk Marketing Board as long as that standard is maintained and the surplus used to level the price, and farmers are still willing to produce it, why should the Minister wish to curtail that production? After all, a pint of milk costs 8d. and is a much cheaper food than a bottle of beer, which costs 1s. 6d. To curtail the production of milk seems, on all the facts, to be utter nonsense.

A Nottingham University agricultural economist recently produced some figures showing that out of some 150 farmers a quarter of them had less than £10 per week of net return. That represents a net income of £10 a week for all management and wages costs and interest on money. The figure of profit for most farms was about £4 per acre.

I notice that in an interview given by the Minister in Paris the other day he said that the incomes of farmers was "agreeably high." That might be the case in certain circumstances, but that statement would certainly not apply to the farmers covered by the study made by that Nottingham University economist. The Minister should take a lesson from the present system of marketing milk. Of course, there have been little or no imports of liquid milk and, thus, the Milk Marketing Board is able to control all the milk produced. There is a fixed price, a controlled price, and the Board is able to handle everything it has to sell.

This should apply to all finished products—meat, mutton, pig meat, eggs, sugar beet and potatoes. Consider the Potato Marketing Board, which does not have the same teeth as the Milk Marketing Board and, therefore, is not nearly as successful. The figures quoted by the hon. Gentleman the hon. Member for Aylesbury were not as accurate as he might have thought on the subject of potatoes. I do not think that the support price buying of potatoes affects prices as much as he thought. Certainly the consumer of potatoes did not get much advantage out of the shockingly low price the farmers received in the recent glut, and the consumer got very little advantage when the price of potatoes went up three years ago to £30 and more a ton. The Potato Marketing Board should have control of the price in retail and wholesale sections of the trade. Only in that way would the housewife not be subjected to high and low prices for her potatoes. When there is a shortage of supply the price would remain reasonable, and when there is a glut it would still remain reasonable to the housewife and yet the farmer would get a fair price for his potatoes.

I suggest that the Minister should leave raw materials like coarse grains alone, but couple their production to fertiliser and lime subsidies and continue the production grants for marginal land.

Mr. J. M. L. Prior (Lowestoft)

The hon. Gentleman has described the activities of the Milk Marketing Board and has suggested the making of similar arrangements for meat and potatoes. How does he think that meat, for instance, could be organised in the same way as the marketing of milk, which is a single product? Could he explain how this could be done?

Mr. Mackie

It is amazing the way hon. Gentlemen opposite are so impatient. This is the second time that the words have been taken out of my mouth, for I was coming on to that in my next sentence. I was going to say that the Minister should continue the farm improvement schemes but should think again about special ones for different sizes of farms. All this will require a policy of marketing and of import control. There would be no difficulty making arrangements for meat, and everything to organise a scheme for meat could be done rationally, with the slaughter-houses, with cold storage space and so on to enable the meat to be stored in times of glut so that a reasonable price is maintained the whole time. That is not the case at present. It would not be an easy job, but it is one that must be done.

Judging from the Minister's speech at Oxford earlier this year, dare we hope that he is thinking along these lines? He mentioned the difficulty of import control and the fact that the Government might have to think about it. One thing is certain, and that is that agriculture in this country cannot expect to go on the way it is at present.

The deficiency payment system lends itself to careless marketing to such an extent that this past year the housewife was really paying twice—I do not mean double. We are all agreed that agriculture must have support. My right hon. Friend the Member for East Stirlingshire has pointed out that agriculture in Britain requires sound support, and he put a strong case for this. Common Market or no Common Market—and I hope that I am not going out of order in mentioning this—the Minister gave an interview in Paris recently and said that the whole system of farm subsidies would have to be changed. This debate, if that is the case, is almost a waste of time, because the Minister also said that the present guarantees would only carry for the length of this Government. In his speech today, the Minister pointed out how far forward the Government had to plan. In any case, this Government have been going for quite some time, but one never knows what will happen next. It looks, however, as if this Government do not have all the time in the world in which to make their plans, and I would appreciate it if we could be given some information about these plans. It seems fairly obvious that time is running out for this Government, so some information on this aspect is certainly needed.

I must emphasise that the Act of 1947 did a power of good for agriculture in this country, not only for the living standards of the farmer but for the farm worker. It has helped to give the farm worker a living standard which he deserves, and I hope that he will get an even higher standard, for he deserves that, too. But the system must work fairly between producer, distributor and consumer, and the present system is not doing that. We look forward to hearing what the Government intend to do, other than appointing a committee which, in any case, I think was an afterthought on their part in an effort to get out of their present difficulties. If the Minister would like some help, I suggest that he should take a look at our programme and save some of the expense of a committee by adopting the ideas we put forward of a system of fixed prices and import controls, coupled with marketing boards.

6.20 p.m.

Sir Richard Nugent (Guildford)

I am glad of the opportunity to join in this interesting debate, but I cannot deal with all of the points raised by the hon. Member for Enfield, East (Mr. Mackie) in his interesting survey. I should like to take up what I reckon was the substance of his attack on the Government, which was also the substance of the attack by the hon. Member for Workington (Mr. Peart) and by the right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn), and that is that the Government's policy is at fault, in that it has established a deficiency payment system in a free market, and that that is undermining the 1947 Act.

It surprises me that hon. Members opposite, and especially the hon. Member for Workington, should say this, because their memory should be good enough to bring the recollection that the 1947 Act was introduced with a White Paper which contained these words in regard to price guarantees: The price may be a guaranteed fixed price; a rate of deficiency payment related to a standard price; an acreage payment; a subsidy; or a price calculated in accordance with a formula, of which, for example, the price of feedingstuffs might be the basis. The deficiency payment was always contemplated in the 1947 Act, and, indeed,——

Mr. Harold Davies (Leek)

In a controlled market.

Sir R. Nugent

No, not in a controlled market. At standard prices.

The main subject of criticism today is the scheme made under Section 4 of the 1947 Act, as prolonged by the 1957 Act.

Mr. R. E. Winterbottom (Sheffield, Brightside)

Does the hon. Gentleman recall the provisions of the 1947 Act with regard to deficiency payments, and will he agree that when introducing the Bill the Minister made it perfectly clear that deficiency payments must go along with something else to make them effective and efficient in British agriculture?

Sir R. Nugent

He did nothing of the kind. It is very surprising that hon. Members, who to their credit put the 1947 Act on the Statute Book—and Section 4 is the Section which gave birth to the scheme which we are now discussing—should now disown it and chastise the Government for proceeding with it. This is like the attitude of the cuckoo in kicking the eggs of other birds out of the nest; but it is a very inexperienced cuckoo that kicks its own eggs out as well. This is what the hon. Member for Workington has been doing, and I suggest that hon. Members should have another look at the legislation which they passed, when they will see that the system which we are now working is the one contemplated by them, but which, in the event, it fell to us to develop.

I am sorry that my hon. Friend the Member for Aylesbury (Sir S. Summers) is not now in his place, because I should like to thank him and the other members of the Select Committee for their admirable Report, which, I am sure, has been most helpful to hon. Members on both sides of the Committee in trying to understand this very complicated matter. I can remember having some familiarity with the mysteries of the price review and the price guarantee system, and it is most helpful to us to see it set out so clearly.

It is true that inherent in the system is the fact that we cannot estimate exactly what it will cost from one year to another. My hon. Friend the Member for Aylesbury made that point quite clear. Certainly, I agree with the point made by the hon. Member for Enfield, East that the butchers might indeed have got a bigger slice of the cake last year than in the previous year, but all of us who know anything about the butchering trade know that the profit margins vary a good deal from one year to another. I would not like to say what they did get away with, but one must take into account the fact that they had had a pretty thin year the year before.

Before I come to the specific points that I want to discuss on this Supplementary Estimate, I should like to record the virtues of the system. Despite everything that hon. and right hon. Members opposite have said, the system does work. First, it works to give protection to farmers and guarantees the price which the Government wish to have guaranteed to them, and, secondly, it gives consumer choice over the counter, and I shall say more about that later on. With regard to the first point—guarantees to farmers to give protection to the farmers. The very big increase in production in the last ten years well illustrates the confidence which they have given to farmers in the past ten years by the increases in production: beef 48 per cent., mutton and lamb 60 per cent., and pigs 35 per cent. So that today in this country we are producing about 70 per cent. of our total meat requirements, compared with 50 per cent. ten years ago. This is a very valuable increase, and a very useful saving of imports of from £100 million to £150 million a year. Of course, the system is not perfect. There are defects in every system, but it works broadly to the national advantage, and I think that the Committee should look at the position in a broad sweep, taking one year with another.

This is an exceptional Supplementary Estimate, as my right hon. Friend explained in his masterly survey, due to a combination of factors which, unfortunately, combined together to push the whole thing in the wrong direction. I should like to comment on two things. First, the working of a price guarantee system, and secondly, the distribution and marketing system. The price guarantee system was designed in 1954 to work with the live fatstock markets with deficiency payments, and, despite what has been said from the other side of the Committee, at that time, and indeed today, this was the only way in which it is possible to get rid of the system of State trading in order to give choice to the housewife over the counter.

For the housewife to have this freedom of choice over the counter, at some point in the chain of distribution from the supply point on the farm to the shop counter at which the housewife buys the goods, supply and demand must meet, and the price mechanism must work so that the price must equate supply and demand. In that way, the housewife is given freedom of choice over the counter, right back through the distribution from the farm to the wholesalers and dealers in the market. The fact is that there is physically no other way of doing it. I am not denying that in an ideal world we could get better results; for instance, if we could do the whole thing on the hook—on a deadweight basis. But the physical facilities for that do not exist. They are gradually coming into existence, and I should like to see them come into existence more rapidly, because it is the right way of doing it, to give choice for the consumer by equating supply and demand. Therefore, it was introduced to work with deficiency payments which would make up the average return of the farmer to the guranteed price level, and it was always intended that the deficiency payments should work without interfering with the market, and so was designed in the first place with a device called the "rolling average".

Two years later, in 1956, the farmers complained that there was too much variation in their gross return, with the market and deficiency payments, and asked for greater stability. I was at that time in the Ministry of Agriculture, and I must confess that I felt very reluctant to introduce anything into the system which would make for greater rigidity, but we did introduce what is called a "stabilising band", and it was that which, in 1961, was one of the main factors which have added to this bill.

The stabilising band was introduced on a seasonal curve as the average price estimated, and the device works so that the price paid to the farmer is the finished payment. If the market price falls more than 7s. below the guarantee price on the seasonal curve, or rises more than 7s., the market price above or below that in included, and the finished payment remains the same.

Let us take the case of a falling market. It means that if the market price falls more than 7s.—that is about 4 per cent. or 5 per cent. for cattle, and there are similar systems for sheep and pigs—or if it falls 30s., 40s., or 50s.—as it did last year—the farmer has no interest in that at all. He still gets exactly the same payment. There are many defects about a live marketing system, as those who are familiar with it well known. But one of the virtues of live cattle marketing is that if the farmer meets a bad market, a market which is glutted and where bidding is weak and prices fall, he can take his animals back home and market them again another day when conditions are more favourable for him.

With the stabilising band system, however low the market falls, the farmer has no incentive to take his animal back home. That is what happened last year. However low the market falls, the farmer will leave his animals to be sold knowing that the return to him will be the same. He has no incentive to study the interests of the taxpayer.

Mr. Woodburn

Would not the right hon. Gentleman agree that what he has said may apply to a man farming in a big way who has plenty of transport? Small farmers cannot afford to carry cattle backwards and forwards to market. They have to sell their animals for what they can get.

Sir R. Nugent

It is surprising what farmers, both large and small, will do, if it pays them to do it, if the incentive is there. The fact is that by introducing this rigidity into the system we have removed the normal incentive for a farmer to study demand.

I have no doubt that this year—I am speaking of the current year, 1961—the serious defect was because the guarantee price had been raised by 10s.; so that if 7s. were subtracted from the price the farmer was still 3s. to the good over what he expected at the last Price Review. The result was that not only did more cattle come forward than was expected but a number of unfinished cattle came on to the market, which greatly aggravated the situation.

I urge my right hon. Friend to look at this matter again. Certainly we want to get a reasonable stability into the system, but this arrangement is not to the interest of anybody. It is obviously not in the interest of the taxpayer. It is not in the interest of the consumer because it is glutting the market, and it is not in the long-term interest of the farmer whose job it is to study what the consumer wants. Therefore, the stabilising ban must be substantially modified. There are a number of ways of doing this, but I will not attempt to describe them now.

The other point I wish to make about the working of the system relates to grading. This was touched on by my hon. Friend the Member for Fyfe, East (Sir J. Gilmour), who made such an admirable maiden speech. The live-weight grading is still much too lax. All who are familiar with grading know that it is not a science but an art, and the eye of the grader is never as precise as is the eye of the butcher when he has the carcase on the slab. As a result, the present system of grading favours live-weight as opposed to dead-weight grading because it is always easier. In last year's market there were many animals which ought not to have been graded, and so somehow the system of grading must be made tougher and fairer on treatment by dead-weight grading. Dead-weight marketing must be the marketing of the future.

I agree with what was said by my right hon. Friend regarding the finish payment system. We have a different situation from that which existed when the system was designed. Now we produce 70 per cent. of our meat at home and imports represent a relatively small part. Undoubtedly the time is coming—whether or not we go into the Common Market—to look again at this system to see whether we should not change the system of price support and turn to another system which might still achieve a comparable level of prices by using different machinery.

The marketing system for meat is creaking. The traditional pattern depends largely on the family butcher and it no longer meets the present-day demand. Of course, the family butcher has a big part to play, and will continue to play it. Many of the best of them buy their own beasts in the market. They know what their customers want and they do a very good job in supplying that demand. But today there is an ever-increasing demand from self-service and chain stores for large quantities of joints at a standard quality and size, pre-packed and over-ready for the housewife to use. The present-day system must be able to measure up to that situation. The carcases must be moved swiftly from the slaughterhouse by refrigerated vehicles, cut up and made available to the retailers. The process must be quick in order to preserve the quality and flavour of the meat.

In the present system there is all too little of the necessary efficiency to meet that situation. There are a certain number of private people engaged in it, and my point is that farmers must get into this marketing situation. They must take a greater interest and play a greater part. They must know the requirements of the housewife and breed and manage their animals in a fashion which will meet that demand. There is a trend in the market for fewer buyers buying on a larger scale, and farmers must combine together in co-operative arrangements of one sort or another to match the big buyers by becoming big sellers. There is an excellent example provided by the Fatstock Marketing Corporation, which handles nearly 20 per cent. of all the fatstock. That is the right procedure. There are a number of private ventures where farmers are doing something similar, but there is a need for more who will work alongside the many efficient private enterprise organisations which are doing that work.

I urge my right hon. Friend to try to think out some measures to encourage farmers to play a bigger part in this kind of marketing. He has already done something for the horticulture industry by the 1960 Act with grants for cooperative ventures. The same idea could be applied to this market. It would be more difficult because this commodity would be more difficult to handle. But something could be done, and this is the way in which we should operate. That is the way things are going in any case, and I want to see the farmers playing a prominent part.

The hon. Member for Enfield, East made some interesting comments about marketing boards. No one in the Committee has had a greater interest or privilege than I have in promoting marketing boards. Every one we have today I was able to play a major part in bringing into being. I am a firm believer in them, but not for this product. I believe that the question my right hon. Friend posed is the key question. Would it be necessary, if we set up a producers' fatstock marketing board, to give it such large powers to have effective control over this immensely complex and varied commodity that it would be unacceptable to the community as a whole and not, therefore, in the national interest? I am bound to say that my instinct is that it would.

Mr. Harold Davies

I wonder if the right hon. Member's instinct works the same way when it comes to the question of monopolies for fertilisers and feeding stuffs?

Sir R. Nugent

I am not so much troubled with the principle as with the practice. Milk is a homogeneous commodity and the Milk Marketing Board is doing an admirable job, but to get control of a commodity which is so varied—there are thousands of different cuts—I do not believe it would be possible to set up an authority in a way which would be acceptable to the nation as a whole. I am not at all sure that the farmers would vote it in. All too many farmers still believe that it is best to market their animals on the hoof. I am very doubtful whether there would be the necessary two-thirds majority for the proposal.

Mr. Loughlin

May I remind the right hon. Member that the N.F.U. is now thinking in terms of some organisation such as a marketing board, but not necessarily on the same pattern as the Milk Marketing Board?

Sir R. Nugent

In fact, the N.F.U. is not doing so. It is studying the question of a marketing board, but its prime idea is the promotion of schemes like the Fatstock Marketing Corporation, which is quite different. Those are not schemes for the control of a whole commodity.

I believe that the present system can still serve well for the short term, the next two or three years in which we may wish to use it. Taking one year with another, it has served well. I am sure that my right hon. Friend is right not to be panicked into making some changes which might have a dramatic but upsetting effect on the distribution of meat. I am sure he is right to set up an independent inquiry which will yield a most useful report to guide development in the future.

In the long term, I am sure that the time has come to look for a new system of price guarantees. I earnestly hope that he will find some means of encouraging farmers to take a greater part in the marketing and distribution of meat where such a big development is taking place. I have every confidence in my right hon. Friend steering policy in the national interest and in the interests of farmers and consumers.

6.42 p.m.

Mr. Frank Tomney (Hammersmith, North)

When the Minister started his speech today he reminded me of an essay on persuasion based on hope and hoplessness. Only when he got to the end of his speech did we get an idea of what he, the Cabinet and his Department might be thinking and recommending.

For the Minister to guarantee the present system in perpetuity, it would be necessary to have at least two things. We should need a severe restriction of imports and perpetually bad summers in Great Britain. Then he might succeed, but neither of those things would be very palatable to the public. I have listened to this debate on an industry about which, frankly, I do not know much. There are no farmers in my constituency, but there are many consumers. It is the consumers with whom I am concerned and with whom the country is becoming increasingly concerned over the matter of the increasing range of farming subsidies. Before very long there must be a limit to the amount of subsidies that the taxpayer can pay to the farming community.

This Report has high-lighted the position, probably a little viciously. It is a good Report, but, as is usual with an Estimates Committee's Report, we get it after the money has been spent. The conclusions of the Report point the way in which the system has run wild since its inception in 1947 and when it was based on the principle of freedom from responsibility in the industry in 1954. We have farmers taking advantage of every part of this system in order to get the rewards. In fact they did that by flooding the market last year. Doubtless advantage will be taken of deficiency payments.

The point which the industry must realise was made by the Minister in the last few sentences of his speech when he referred to the possibility of changes. Although there was a promise to keep this system operating for the remainder of this Parliament, the Minister pointed his finger at the conclusions which concern every hon. Member. It is not a question of whether we go into the Common Market or do not go into it. It is a question of changing conditions. It is a question of Britain changing consumer conditions.

We have been told about a large broiler industry which was so large that the average profit worked out at only 1¼d. a bird. This is remarkable. The butchers seemed to have recognised this in advance of anyone else. There has not been a survey into the changing buying habits of the housewife in the last five years. This is the first priority we need before we can fix deficiency payments.

Mr. Prior

The hon. Member is not correct in saying that there has not been a consumer survey. The National Farmers' Union has discussed this matter in the last few months.

Mr. Tomney

I am not discussing the National Farmers' Union. When I say that I want a survey I mean that I want it done by a Government authority. I want the facts, not the picture as people wish to present it. How much over-the-counter beef is purchased week by week in this country? Since when have subsidies created a demand for more money? All this has an effect on the money left in the consumer's purse. How many housewives buy beef every week? Very few. This is the reason why there is this glut on the market. It is at that end where things have gone wrong; the other end was always guaranteed.

This Report is absolutely conclusive. My hon. Friend the Member for Workington (Mr. Peart) said that the system had broken down. It has completely broken down under these conditions and it cannot be put right under these conditions. The right hon. Member for Guildford (Sir R. Nugent) has taken this a step further in the debate. He has explained to me a little more than I formerly knew about this complex industry. Of course, he is on the right track about a marketing board. The price has to be reflected in the shops.

In the main we are an industrial, exporting nation. We desire to, and ought—as far as possible in our capacity—to retain a healthy farming industry. It would be wrong to discontinue at once the system of subsidies which has been of such great benefit to the farmers. It would be wrong to remove the benefits of the 1947 Act. That was Labour's dream of restoring the countryside to something of the condition in which it ought to be. From now on there has to be a selective examination, subsidy by subsidy, of its value to the country in terms of revenue and balance of payments. In an industrial nation, unless we export we cannot import, and some of our imports have to be from agricultural countries.

It is no good the Government trying to subsidise the growing of wheat on Ben Nevis. Now is the time for financial and political retrenchment on this issue. It is a national situation which cannot be overriden.

The industry employs a remarkable proportion of people in Scotland. I was surprised to hear from the hon. Member for Fife, East (Sir J. Gilmour) that in Scotland, one person in six gets a direct living from the land. I do not think the figure is anything like that in England, or so concentrated. [HON. MEMBERS: "Nor in Scotland."]

Sir J. Gilmour

What I meant to say, and, I hope, did say, was that one person in six lives on a farm. It is the population that live on the land.

Mr. Tomney

I am sorry; I must have misunderstood. Had that figure been true, I should need to do some rethinking.

The situation as I, an ordinary townsman, representing consumers, see it is that the deficiency payments system has completely broken down, as the Report shows. In determining the future figures at the February Price Review, the Minister seems to use guesswork, because the figures from the previous quarter, on which an assessment could be based, are not available. The Minister it seems, takes the old-fashioned view of accepting a figure. He should then cut it by 50 per cent. and then cut it again by 25 per cent. If he had done that in this case his figures would have broken even.

That is a rough and ready guide, but certainly the taxpayer cannot for ever subsidise the farming industry to this extent. It may be that within two or three years the whole system must be recast. If so, it is not too early to start recasting it now. I urge upon the Government and the Minister, however, to study a little more the effects of this kind of policy on the domestic policies of the Government in relation to the people. It is no good imposing pay pauses, pushing up rents and doing things like that if, on the other hand, the Government give hand-outs of this character—£78 million—to what is, after all, private industry.

6.52 p.m.

Sir James Duncan (South Angus)

I do not in the least object to the hon. Member for Hammersmith, North (Mr. Tomney) speaking from the viewpoint of the consumer. He has complained of the heavy subsidy bill. Today, we are discussing an additional £78 million on top of £266 million, making a total of £344 million. The point at issue between the hon. Member and myself is whether the taxpayer or the housewife should provide that support.

The hon. Member has spoken from the point of view of the consumer in Hammersmith, an area I used to know well, because at one time I was the Member for North Kensington, next door. Under the present system, the only way to avoid these increased subsidies is to increase the market price. The reason for these increased subsidies is that the market collapsed last summer. The hon. Member has said that the housewife will not support these high subsidy figures in future. Does he want the consumers in his constituency to pay more for British food? That is his choice.

Mr. Tomney

The hon. Member should read the Report which the Minister presented. It is conclusive when it states that the production of so large an amount of beef should have been reflected in falling prices in the shops. It was not reflected in falling prices, for the reasons I have said. Therefore, the housewife pays twice, as a taxpayer and as a consumer. That is the difficulty.

Sir J. Duncan

I agree that a certain element arises from the fact that although the market collapsed last summer, the consumer did not get sufficient benefit from the temporary reduction in price. I hope to say a word or two about that.

A great deal of publicity has been given to this Supplementary Estimate, but practically no publicity has been given to the next Supplementary Estimate, which was published over the weekend and totals £76,749,000 which is almost the same figure. It refers to a large variety of subjects. It is a little unfortunate that agriculture should have been singled out for all this adverse comment, whereas the later Supplemen- tary Estimate came out with practically no publicity.

I should like to express my admiration of the speech of my hon. Friend the Member for Fife, East (Sir J. Gilmour). I am delighted that we have from Scotland yet another practical farmer who lives in his constituency and who, I am sure, will be a great asset to the House of Commons. Like the right hon. Member for Clackmannan and East Stirling-shire (Mr. Woodburn), I served with my hon. Friend's father, not only when he was Secretary of State for Scotland, but also when he was Minister of Agriculture and Home Secretary. In all those offices, he was a distinguished statesman. I am sure that my hon. Friend is a chip off the old block and will be following his father's footsteps with the same honour and success in the years to come.

The country has been disturbed by the size of this Estimate. I agree with the interpretation of the reasons by my right hon. Friend the Minister. The Estimates Committee has done an extremely good job in explaining how the deficiency arose. First, there is the timing of the Estimates. They are not Estimates, but rather guesses, because the period covered is far ahead, extending over at least fifteen months, and in those conditions it is impossible to guess right.

Then, there is the question of market prices which have to be guessed. Here, too, there is an enormous margin for error. There is also the question of imports. In December, the Government cannot possibly know what will be the volume of imports in the following December. There is no accurate knowledge of the number of animals or the quantities of produce coming forward. In the case of cattle, the estimate was between 2,200,000 and 2,400,000, but the actual figure will be 2,600,000. Too much has been made of the fact that the extra 10s. per cwt. brought more cattle forward. They would have come forward at some time during the year in any event, but they came forward for weather reasons.

In the document covering the Price Review it is said that Although the number of animals slaughtered in 1960–61 shows an increase on the previous year, the number of calves retained for beef production has recently been falling. With consumption per head still below pre-war, demand for beef is likely to remain strong. It then goes on to state that the guarantee had to be increased by 10s. per head.

While those responsible were anticipating in December, 1960, from the figures which they had, dating back to June—the December returns had not yet come in—they had a completely wrong picture of the number of calves which eventually came into the beef market last summer. This gives an example of the inaccuracy of the knowledge, and that is inevitable under this system, at any rate in estimating the numbers of cattle. As for quantity—and I just mention, for example, potatoes—there again, due to the weather, even if the acreage is known, a variation between one season and another is equivalent to two tons an acre. It is, therefore, quite impossible to make any accurate forecast in the December of a year what will be the production in April—not of the following year but of the year following that.

Then there is on meat a fairly new and extra imponderable, and that is poultry. It is estimated that this year there will be some 350,000 tons of poultry on the market, a vast increase on, say, five years ago. Of course, there is no guarantee in this, but it is really becoming a factor in the pattern of consumption of the consumer, as the hon. Gentleman the Member for Hammersmith, North said. So I do not think that, on those main grounds, the Government can be blamed for the inaccuracy of this Estimate.

The total is very big. The total is big because we have been increasing production, and we farmers have increased production because we have been asked to in successive Price Reviews. And for another reason, too: the very fact that increased costs have been forcing on us for years increased efficiency. As the squeeze comes on from the Price Review, increased costs have to be absorbed, or a very large proportion of them. So, during the year, particularly with commodities like milk, a farmer is almost bound to increase production from his land in order to get the same net return. That is wholly applicable to milk, where the tendency has been to squeeze in another two or three cows for milk, in order to get the same net return. So we get large bills today because under Government policy—and not the policy of this Government alone but of every Government since the war—the tendency has been to increase efficiency, to squeeze efficiency into the farmers; and in return they have to get increased production in order to get the same net income.

Therefore, I do not think we should complain about this increase. The only question is, can we pass it on to the consumer, or will the taxpayer continue indefinitely to subsidise at this rate?

The Agriculture Act, 1947, quite clearly—it is in Section 1, and I do not think it is a bad thing to read it out occasionally because it is forgotten sometimes—lays down, as stated in the Estimates Committee's Second Report, that The Minister and the Secretary of State for Scotland are obliged under the Acts to maintain ' a stable and efficient agricultural industry capable of producing such part of the nation's food and other agricultural produce as in the national interest it is desirable to produce in the United Kingdom, and of producing it at minimum prices consistently with proper remuneration and living conditions for farmers and workers in agriculture and an adequate return on capital invested in the industry'. That is the policy laid down by hon. and right hon. Gentlemen opposite, and my experience over the years of operating this policy, with its concomitant Act of 1957, has been that we have been able to increase our efficiency enormously. The right hon. Gentleman the Member for East Stirlingshire three times mentioned the question of efficiency. We have been forced to and are still being forced to increase our efficiency year by year, and the guaranteed prices in the 1961 Price Review were not unreasonable.

The fact that we never achieved the guaranteed prices, I think, in any week in the year, is not the fault of the farmer, because the 1953 scheme of deficiency payments instead of fixed ones was designed to give the efficient farmer of the high-class beef cattle more than the guaranteed price. But we have not got that this year. We have had it in past years, and the taxpayer has had to pay nothing, but this year even the best cattle have never achieved the guaranteed price. So I do not think that the guaranteed prices as agreed at the last Price Review are at all unreasonable, and pressure of increased costs has increased efficiency.

The problem still remains: what, therefore, do we do? I think that my right hon. Friend was right when he said that this is probably a wholly exceptional and unique year when everything conspired to go against us, when meat production went wrong, for the reasons that he gave, and even the pig meat scheme went wrong because of a strike in Denmark which brought undue quantities of bacon into this country when prices at that time were low.

I do not think it is likely that in the coming year this will happen again. For instance, there is likely to be no payment on potatoes this year, or only a small one, because payments under this Supplementary Estimate are in respect of last year, and I do not think there is likely to be any payment on potatoes this year. Market prices for meat the last week or two have been very much firmer, and should continue to remain firm at any rate all through the spring.

I do not think there is very much room for manœuvre within the system, although it may be necessary to review the details of the system, as my right hon. Friend the Member for Guildford (Sir R. Nugent) said; but in the system as a whole, which has worked successfully, the limit of reduction in the next Price Review is about £30 million if the whole 2½ per cent. is taken. That is the limit of manœuvre. The whole 2½ per cent. has never yet been taken, and we have got to set against that, as the right hon. Gentleman said, about £13 million or £14 million increased costs. So the limit of manœuvre is about £15 million altogether. Therefore, I do not think there should be very much or any very revolutionary change in the next Price Review.

One or two things could be done, I think. One is that there should be much quicker action against dumping. The Committee will remember the troubles we had last year over barley. Action, I suppose, was taken quickly enough, because there is a plus figure in the Estimates for barley, but there was a minus figure last year because of the low price of barley. That is an illustration of what can be done and what ought to be done by the Government—I believe that wherever there is dumping the quickest possible action should be taken to stop it, not only in the interests of the producers of the commodity affected, but in the interests of the Treasury and the Chancellor of the Exchequer.

Secondly, there should be better control of imports. I am not going into the bigger problem of control of buying but there should be better control. There was set up some years ago a voluntary body, which is still in action, called the Bacon Production Council, an unofficial body, but, up to last summer, it worked extremely well. Something went wrong with it last autumn largely because of the strike in Denmark. It broke down and bacon poured in just at the wrong moment. The Bacon Production Council showed us the sort of thing we ought to go in for with other commodities, too—an international body governing imports and organising the imports so that they do not interfere too much with our own prices.

The next suggestion—and I think the central one in the debate today—is the better organisation of the meat market. The hon. Member for Workington (Mr. Peart) muddled me today. I do not know what he really meant. He talked in a loud voice about rationalisation. He talked about rationalisation of slaughtering. Does he mean the cutting down of slaughterhouses and causing unemployment among slaughtermen? Then he talked about the rationalisation of butchers' shops and the rationalisation of the wholesale trade. Is he going to abolish Smithfield altogether? We should like to know what he meant. The real point is this: if he is going in, as the hon. Member for Enfield, East (Mr. Mackie) suggested, for central meat marketing with price control and import control? I think that those are the three things he mentioned in the last few words of his speech. Is he going to control the retail price of meat and control prices right down to the shop counter? Because that is really the key to the whole matter. I am really having a go at the hon. Member for Workington and the hon. Member for Enfield, East. Let one or the other get up if he wishes.

Mr. Peart

I said that there were too many slaughterhouses and that meat is inefficiently handled in relation to the slaughterhouses. I agreed that because that was once the Government's declared policy, and they ran away from it. I ask the hon. Member this direct question: is the hon. Member really satisfied with our present abattoir system and marketing?

Sir J. Duncan

I was engaged on the Slaughterhouses Bill with the hon. Gentleman. I know what a mess the thing was in England. [HON. MEMBERS: Hear, hear."] That was some years ago.

Mr. Peart

The hon. Member has now admitted that it is a mess in England. The Minister of Agriculture, Fisheries and Food is responsible for England and Wales, and I suggest to the hon. Member that he has given his case away already.

Sir J. Duncan

I said that it was a mess at the time that the Slaughterhouses Bill went through this House and that was the reason that the Bill was passed—to improve matters. Time has gone on since then and improvements have been made. I have heard of new slaughterhouses going up everywhere.

As the hon. Member for Enfield, East probably knows, in Forfar we have one of the finest modern slaughterhouses in the world. We are rationalising this in the way it should be rationalised, modernising and expanding, but not necessarily having these enormous abattoirs which there are in Guildford and one or two other places. The hon. Gentleman has not answered my last point. Is he going to control imports and control prices right down to the retailers? This is what I want to know. That is the question I want to have answered. If that is to be the Labour Party's policy every butcher and farmer will be against it.

Mr. Woodburn

The hon. Member heard his right hon. Friend saying that future marketing would be of pre-packed cuts in the self-service shops. Does he not think that these will be priced very definitely?

Sir J. Duncan

The point is who is going to pay for the pre-packaging and that sort of thing? This is being done in organisations like the Fatstock Marketing Corporation, and a large number of private people are doing it today. This is being done now, and those are the people who are going to organise it. I hope in the future that they will do what my hon. Friend read out was being done in Australia, and that they will gradually, particularly if we go into the Common Market, get their hind-quarters of lamb into Paris and the fore-quarters into Brussels. If some of the people in Brussels like that sort of thing, good luck to them.

Mr. Peart

Rationalisation.

Sir J. Duncan

Rationalisation, according to the hon. Member for Enfield, East, is central marketing, State marketing and price control. I am not sure whether it is to be night down to the retail outlet.

Mr. Mackie

I did not say it was central marketing and I did not say it was price control. I said that we would have marketing boards through which all the produce would go. I happened to say that the Milk Marketing Board and the Egg Marketing Board were working well. We all know that there are fixed margins in the case of milk and eggs. Retail buyers would go to the abattoirs and select their meat at fixed margins. That is a perfectly rational system instead of the ridiculously mixed-up system that we have at present.

Sir J. Duncan

I was trying to get from hon. Members opposite what is the Labour Party's policy, as the Government have not got one. [Interruption.] As my right hon. Friend the Member for Guildford said, that is all very well for milk, which is what he called a homogeneous commodity. If we are seeking to sell meat, with thousands of different varieties and cuts, throughout the country, and have price control for each cut, it will be quite impossible to operate such a scheme. There will be different qualities, cuts, sizes and weights, and I do not think that we could operate a marketing scheme effectively unless we have a more or less homogeneous commodity.

Mr. Hoy

Did the hon. Gentleman say that he wanted to know what our policy was because the Government did not have one?

Sir J. Duncan

I am sorry, the hon. Gentleman must have misheard me. I said that I was trying to find out what was the Labour Party's policy but I had failed. The Government's policy remains what it is today—deficiency payments combined with a free market. I said that it was imperfect but that on the whole it was working extremely well.

Mr. W. Baxter

If the present position is an indication of the agricultural policy of the Conservative Party the hon. Member will realise that in the years of depression in 1938 overdrafts owed by the farmers to the banks were about £8 million. Today the overdrafts owed by farmers to the bank are over £50 million. If we add that to the amount of accommodation given to the farmers of Scotland by auctioneers, insurance companies, mortgage funds, garages and implement makers and so forth, the debt of the agricultural community at the present time in Scotland is in the region of £150 million. Is that the policy of the Conservative Party and is that the policy that they seek to support?

Mr. Eden

On a point of order. I apologise for interrupting the speech of my hon. Friend the Member for South Augus (Sir J. Duncan) but for future guidance during the course of the debate may I ask, Commander Donaldson, whether there are any limits to the agricultural subjects which we can discuss? Should we not be examining the reasons why the Government have found it necessary to introduce a Supplementary Estimate? Should we not attempt to confine discussion to the Report of the Estimates Committee?

The Temporary Chairman (Commander C. E. M. Donaldson)

I was about to rise when the hon. Member rose to make his objection. I think that we are getting very wide of the context of the Supplementary Estimate. I have allowed a little freedom. This is normally a time of evening when the Committee is lightly attended and we sometimes have a little more freedom, but I ask hon. Members to refrain from going wide of the Supplementary Estimate and to adhere more closely to the normal rule from now on. I would add that many hon. Members wish to speak and I hope that interjections from both sides of the Committee will not be frequent or long.

Sir J. Duncan

I will conclude, though sorely tempted to deal with the interruption of the hon. Member for West Stirlingshire (Mr. W. Baxter).

A mathematically-minded farmer in my constituency has worked out that the cost of this £344½ million which is the total cost of agriculture this year payable by the taxpayer is equal to one penny a meal. I would only ask whether the housewife would get off as cheaply as one penny a meal if Britain joined the Common Market.

7.22 p.m.

Mr. R. E. Winterbottom (Sheffield, Brightside)

The hon. Member for South Angus (Sir J. Duncan) represents a constituency which produces very good cattle. I found myself in agreement with most of his speech because he gave largely an academic explanation of what has been happening in the cattle-breeding world. It was only when he dealt with marketing and retail butchering and he put some questions to my hon. Friend the Member for Workington (Mr. Peart) that I began to join issue with him. I shall deal later with the rationalisation of butchering at the slaughtering and auctioneering level, on the retail distributive side and in the control of prices.

I appreciate the fact which the hon. Member for South Angus mentioned that certain organisations carry out a measure of rationalisation, especially in the control of prices, but this is only partial rationalisation in dealing with cattle and the difficulty to be faced is that of proceeding from partial to full rationalisation. I can agree with the policy of deficiency payments. I thank the Estimates Committee for what it has done, but I differ from it in that its explanation of what has transpired is not sufficient excuse for what the Ministry of Agriculture has done.

Most of my speeches in the House and in Committee have been on clean air but I have also dealt from time to time with the subject of clean meat. One of the diseases from which meat production is suffering is not foot and mouth disease or bovine tuberculosis but the disease of Government miscalculation and Government muddle in agriculture. I hope to be able to prove this in the course of my speech. It is clear from the Supplementary Estimate that Government ineptitude has permeated the whole of the cattle-raising industry. I do not propose to deal with subsidies on eggs and cereals. I do not know enough about the subsidies although I have sold eggs and cereals for many years. I know something about cattle, however, and to me Government ineptitude in agriculture is as clear as it is in Government economic policies for our other main industries.

The Supplementary Estimate disturbs us all, including hon. Members opposite who represent farming communities. It disturbs me both by what it reveals and by what it conceals. The hon. Member for South Angus was the first hon. Member to speak in the debate about the overall subsidy to agriculture. He pointed out that it had increased for 1961–62 by £85 million, from £265 million to about £350 million. I am alarmed at the increase and unless a better explanation is provided than that given in the Estimates Committee's Report I shall continue to feel alarmed.

Writers in agricultural papers and in meat industry journals, speakers on television yesterday, and every official body associated with the industry, talk about the missing millions. I want to know where the missing millions have gone. The Minister did not reveal the solution to the mystery today. We were given an extension of the explanation given in the Supplementary Estimate, but there has been no genuine explanation. A sum of £85 million represents the difference in the overall subsidy to agriculture and this is the £85 million question which the Minister ought to answer tonight. On 22nd December the Farmers Weekly said: How has this situation arisen? First, there is the absurdity of trying to estimate at all on the evidence which Government Departments have available in December when the estimates are prepared. They have not even got the December livestock returns in front of them. They do not know, for instance, the size of the ewe flock. So how can they possibly guess at lamb marketings? They do not know what the Minister may decide at the Price Review. So how can they tell either the likely size of the market or what is likely to be the discrepancy between market and guaranteed prices? That is true. It is a statement of fact. The hon. Gentleman the Member for South Angus said virtually the same thing. One cannot argue against facts.

These are exactly the same conditions which existed last year. They are the same conditions which existed in 1955, 1956, 1957, 1958 and 1959. Yet there has been a difference in the increases in the amount of subsidy. An explanation of that factor must be given. The Supplementary Estimate goes further even than the editor of the article I have referred to. It tells us that 5 per cent. error is the estimated calculation. This represents, in the end, £17 million. In my view, it rightly represents variations in the amounts of home-produced or imported cattle.

It is unnecessary to go on quoting articles such as the one I have mentioned. One can read these articles year after year. These variant supplies are a factor every December and are always a problem before the Annual Price Review. What the Farmers Weekly and the Government forget is that every excuse they use to protect the Minister and to conceal the missing millions has been used before. They are the same excuses each year. None of them explains where the millions have gone. I hope that tonight we shall have a full and frank explanation from the Government. We do not want the explanation which we have had year after year—that it is due to an increase in the number of cattle on which the subsidy has had to be paid or for which deficiency payments have had to be paid. Such payments are infinitesimal compared with the amount of the missing millions.

Mr. Prior

The hon. Gentleman says that he cannot account for these missing millions. I believe that he may have something to do with a Co-operative Wholesale Society. Did it reduce the price of meat last year?

Mr. Winterbottom

I will deal with the problem of price reduction shortly. But before I turn to the problems of the butchers I wish to stress that we should have a full explanation from the Government.

As the situation is now, the Minister reminds me very much of something told to me by my grandfather. He saw a company promoter going to chapel for prayer meetings six nights a week and attending service three times on Sundays. My grandfather's comment was "He should have his books examined." That is the situation of the Government over these missing millions.

The Supplementary Estimate for cattle, sheep and pigs is £66 million. This amount of taxpayers' money is supposed to keep down the price of food to the consumer. But there is nothing in the law, as far as I can find out, which compels anyone to fix a minimum price because of subsidies. Yet we are entitled to expect that, when subsidies are given, they should be reflected, in whole or in part, in the prices of meat. We are told that the price index for meat has dropped 4 per cent. Is that enough?

One correspondent in the Farmers Weekly wrote that he followed the progress of three cattle weighing 9½, 10 and 10½ cwt. from the slaughterhouses to the retail shop. He said that the final cost to the butcher of the animal weighing 10 cwt. was £57 10s., and that the butcher received, through his retail prices, £119—a gross profit of more than 100 per cent. Such a profit is excessive in the circumstances. That was in June of last year.

I know something about butchering. If the correspondent tried to get his estimate from a few casual inquiries about prices in the shops, he would find it difficult to get a true and final analysis of the amount of money received in retail prices. Nevertheless, in analysing the prices as issued at Smithfield over the past twelve months, I am forced to the conclusion that there has been a reduction in the wholesale price of meat of about 21 per cent. overall. After making inquiries among retail butcher friends, I have also concluded that this fall has not been reflected by a reduction in retail prices. That is a very important matter.

The Minister has admitted to a mistake in his figures. He said originally that £35 million had gone to the consumer, £31 million to the producer, and £10 million to the butchers. That was his original estimate, from which he has now departed. The time has come when, if we are to have variations because of deficiency payment and variations in the price of cattle as a result of the annual price review, we should have from the Minister, if necessary in association with the Minister of Labour, something in the nature of an official wholesale price index, published, together with the retail price index, as a guide to the consuming public. If we had this system we should have a better idea about where we stand on these matters, and would not be faced as taxpayers and consumers, with such problems as these missing millions, with the farmers, wholesalers, auctioneers and butchers all saying that they have not had them. One thing we do know is that, no matter what the Minister has said about the retail price index, or what I have said in presenting my analysis, the ordinary housewife says that she has not had it either.

Something has to be done about prices of cattle to give justice to the farmer, justice to the middle man and justice to the butcher, and this is the final problem with which I wish to deal—how to bring order out of chaos. We are facing chaos in agriculture. The National Farmers' Union is gravitating slowly but surely to something like a meat marketing board and just as surely towards something like a greater degree of concentration of slaughterhouses.

I was a member of the Standing Committee which considered the Slaughterhouses Bill. During the course of about thirty meetings, hon. Members from the Opposition said a great deal about slaughtering in this country and most of what we said has been proved to be true. "There are tricks in every trade bar ours", say the butchers; "There are tricks in every trade bar ours", say the farmers. I could find a wrong-doer in every section of this society, but very few in most of them.

However, a meat marketing board and a greater degree of concentration of slaughterhouses, plus a development of the present Fatstock Marketing Corporation, with authority to watch over home-produced and imported cattle—the latter being a vexed question—perhaps under the auspices of the Government, could well be a wise rationalisation for wholesale and retail butchering which would introduce a wise control of prices.

One of many illustrations which I have in mind is taken from the Farmers Weekly of 2nd February and concerns slaughterhouses. This is a most interesting article headed: Export hopes die in the slaughterhouses The story concerns a well-known, highly specialised firm sending cattle to Germany. It has to send them on the hoof. The Germans want the cattle on the hook, but they will not accept them on the hook because the quality of our slaughterhouses does not compare favourably with that of those on the Continent.

The sort of marketing board which I have suggested would bring order out of chaos, which is what we now have in the marketing of cattle; it would improve meat marketing generally and ensure intensive concentration of slaughterhouses; it would deal with pre-packaging; it would deal with those things which do not now come into our shops, and it would deal with deepfreeze and, possibly, with canning. In this concept the slaughterhouses would be guided by the board and there might be a better understanding of the relationship which ought to exist among farmer, wholesaler, butcher, consumer and, above all, taxpayer. As things are, there is chaos in agriculture and the Minister should ensure that order is restored.

7.45 p.m.

Mr. Denys Bullard (King's Lynn)

When the hon. Member for Sheffield, Brightside (Mr. Winterbottom) said that he knew something about butchering and went on to mention the "missing millions", as he called them, I thought that we were to have some indication from the butchering side about where some of the millions might have gone. However, he carefully skated round that question and went on to a more general theme.

My right hon. Friend gave us a clear and honest explanation of this Supplementary Estimate. He explained exactly the circumstances which led up to it and he gave as complete a picture as he could of the probable ways in which the money had gone. I was not quite so satisfied when he later mentioned control of dumping and said that he would write to the countries concerned and ask them not to over-burden our market. My reaction was that something firmer and stronger was required. However, I was pleased with his suggestion of even another committee of inquiry to get the up-to-date facts about the marketing of meat.

I could not understand the contention of the hon. Member for Workington (Mr. Peart), which he repeated several times, that the deficiency payments system had broken down. I do not believe that it has. It is true that this Supplementary Estimate is in a way a serious criticism of it and an indication that it may need amendment, but the system has not broken down. My reaction to the hon. Member's speech—I say this with great personal admiration of the hon. Member—was that he wanted to see the system break down because he happened not to like it and thought that it conflicted with his Socialist philosophy.

I have been interested to see hon. Members opposite reviving the idea of the commodity commission and fixed prices throughout the whole scale of the trade. They must know that a system of that kind is unworkable with a commodity like meat. In order to control price margins throughout the wholesale and retail selling of meat there would have to be fixed prices for commodities like meat pies and sausages. Hon. Members opposite must know that as soon as we attempt to control prices of that kind, there must be a Government sausage and a Government meat pie, so that a black market would immediately appear and everybody would go off the standard article and would go for something brighter which some private enterprise person would have the energy and enterprise to develop. I do not accept that that is a workable scheme. I know that the Lucas Commission favoured it, but it is as out of date as the Commission itself now is.

I want to make a few practical suggestions about this Supplementary Estimate. We must accept that there was bound to be one. We have heard the figure of £78 million thrown about, but we all must have known that some of this was due to come, and there should be no surprise about at least a part of it. After the original Estimate was produced we had the February Price Review which, in return for the increased costs of the industry, awarded a certain sum of money, and that was bound to be reflected in the figures which we now have before us unless there were economies elsewhere. We should not, therefore, express surprise at the whole of the figures, although the total is an alarming one, and we have to examine how it might be reduced.

The second thing which I think is often erroneously said about this Estimate and about the guaranteed payment generally is that they are payments to farmers. I speak as a farmer, but I think that I am capable of looking at the wider aspects of the agricultural industry and seeing all sides of it. Many of these payments are made as a result of the Review, in return for increased expenses which have already been incurred or to which the industry is committed. When 10s. per live cwt. was put on beef, it was not 10s. for the beef producers or the farmers. It was the way in which the Government decided that they could best pay a certain sum into the industry as a whole, and that includes farmworkers, machinery repairers and manufacturers, and so on. The costs which gave rise to the increased payment from the Exchequer had already been incurred.

My right hon. Friend referred to some exceptional circumstances that had arisen this year, and the hon. Member for Workington referred to this as a hard-luck story. There have been exceptional circumstances. But things change. The world price of cereals is now up, the price of beef is up, and, as my hon. Friend the Member for South Angus (Sir J. Duncan) said, potatoes show every sign of not requiring any payment this year, so that in the long run the situation we are facing tonight may rapidly pass, and I think that it would be wrong of the Minister and the Government to make radical changes, as this may be a passing situation.

In looking at the figures and in criticising the method of payment, one ought to be very careful in drawing a distinction between criticising the figures for this year and criticising the guarantees themselves. I have often heard hon Gentlemen opposite criticising the guarantees in terms which lead me to the conclusion that very often—though they may not admit this—they are hitting at the guarantees themselves rather than at the detailed method of their administra- tion. We have to remember that any guarantee which is worthy of the name of guarantee costs money to somebody. There can be a tariff, or quotas, or whatever system one likes, but, if the intention is to give any kind of stability to a farming industry, the system adopted costs a certain amount of money to somebody.

I think that after the war the country rightly decided that the system of guarantees was the right one, not only from a security point of view, but from the point of view of the welfare of the community as a whole, and in particular from the point of view of our balance of payments, and I believe that that argument is as valid today as it ever was. Therefore, I believe that one must be sure that one has a proper system of guarantees, and I think that the system is bound to cost money.

Mr. Peart

I hope that the hon. Gentleman will not give the impression, as he tried to, that we were against a system of guarantees. We are proud that our Government brought in the first major piece of legislation which gave farmers an assured market and guaranteed prices.

Mr. Bullard

If I gave that impression, I certainly did not intend to. I am suggesting that the criticisms which are often made against this Estimate, though they are directed against the details, really ignore the fact that any guarantee system, even that devised by hon. Gentlemen opposite, would cost a certain sum of money. I hazard a guess that the method of fixed prices advocated by the Lucas Committee would cost far more in excess than this or any other estimate that we have had.

I was going to say a word about the good recommendations which the deficiency payment has had from many sources, but as time is short I will not go into that. Suffice it to say that in the White Paper produced in December, 1960, this system was examined very carefully with the farmers' unions, and if anyone cares to read the White Paper he will see some glowing tributes paid to the advantages which the deficiency payment system has to our economy, and in the speech which my right hon. Friend the Lord Privy Seal made on the Common Market—the much publicised and much criticised speech of 10th October—he pointed out to the statesmen of the Common Market countries how greatly to our advantage are many aspects of the deficiency payment system.

My suggestions, which I will deal with only briefly, as to what can be done to reduce this figure are as follows. First, I think that we must have a speedier method of dealing with dumping. I am sure that our experience with barley this year has taught us a great lesson. The barley figure, which is a minus one in this Estimate, would have been a big plus figure but for the action taken by my right hon. Friend the President of the Board of Trade in getting agreement about barley.

I do not think that there has been much mention this evening of the effect of the Irish imports of fat cattle on prices, but this was a matter to which the Estimates Committee attached great importance. The flood of Danish bacon into this country after the Danish strike had a disturbing effect on the market at the time, and has certainly added to our troubles now.

My first point is that we must have better control of dumping. I do not think one can ask for a full-blooded tariff system as well as a guarantee payments system. That is asking too much. One can perhaps have one or the other, but to have the full scale of both would be to demand more than it would be possible to grant.

My second suggestion is the one mentioned by my right hon. Friend the Member for Guildford (Sir R. Nugent), and that is the method by which the average market price is computed. We do not want the old rolling average which succeeded largely in making sure that the guaranteed price was high when the market price was high, and that the guaranteed price was low when the market price was low, which made it largely unintelligible to the farming community, as to everybody else. The present system does not provide sufficient inducement to producers to hold supplies off the market when it is glutted; nor does it provide a proper inducement to the buyer to take advantage of low prices, because he knows that they may be lower still in the following week, owing to the adjustment in the guarantee payments. We must try to create a better system than that which we now have. I am sure that my right hon. Friend is studying this aspect of the problem.

My third suggestion has already been referred to by my hon. Friend the Member for Fife, East (Sir J. Gilmour), in his admirable maiden speech, upon which I congratulate him. He referred to the need for not making too drastic changes in the Review. The increase of 10s. a cwt. in the beef price was a very welcome change to beef producers who have never had a very profitable side of the industry, and have always worked on rather narrow margins. Coming as it did, however, it brought in far bigger supplies than were expected, including supplies of immature cattle. The lesson to be learnt for the future is that we must not make too great changes at one time in the Review, because the consequences can be very far reaching.

Lastly, my hon. Friend the Member for Guildford made a very powerful point when he advocated the creation of organisations to help processing and marketing. The present facilities for storing and processing are not all that they should be, and, excellent though the work of the Fatstock Marketing Corporation is, it has not yet been able to get ahead as it would like with the necessary plant to process meat, especially the cuts that are not popular for immediate fresh consumption. The use of processing and storing has hardly begun to develop in our industry. There is scope for many sorts of organisation to promote this.

I have mentioned four ways in which our present deficiency payment system could be improved to the advantage of everybody, especially in reducing the size of Estimates and Supplementary Estimates. Big changes may be lying ahead in relation to the guarantee scheme. I hope that if we enter into an arrangement with the Common Market countries we shall not be forced to adopt all their policies. It is to be hoped that some of our policies will be adopted by them. As my right hon. Friend the Lord Privy Seal said: Our purpose in discussions with you"— the Common Market countries— will be to gear what has already been achieved for our own farmers into the general aims and framework of the Treaty. I hope that that side of the matter will be carefully watched.

I hope that we shall do nothing to abandon the principle of the Farm Price Review, which is a vital element in our price structure. We all know that the Supplementary Estimate is too large, but some of the features contained in it are exceptional and will not occur again. I hope that we shall proceed on the basis of amending and improving the system rather than scrapping it and attempting to put something new in its place, for it is a well-tried system which has served the whole community, including the agricultural community, very well.

8.5 p.m.

Mr. A. V. Hilton (Norfolk, South-West)

I am glad to follow the hon. Member for King's Lynn (Mr. Bullard), because the problems arising in his constituency are almost identical to those which arise in mine. I agree with him that there must be some control on imports. Unless we have such a control, the consequences can be disastrous to areas like those of the hon. Member and myself.

Much has been said about the need to improve slaughterhouses. When my hon. Friend the Member for Workington (Mr. Peart) suggested this he received a rather rough passage from hon. Members opposite. But many slaughterhouses still leave much to be desired. My home town, Swaffham, in Norfolk, has a modern one, which I recommend hon. Members opposite to visit, and take as an example. It is privately owned, and is rendering first-class service. My hon. Friend made a first-class speech, and proved he has a good grasp of the subject.

Many hon. Members opposite have congratulated the Minister on his speech, but the only thing I can say of it is that it was a long one, and that the right hon. Gentleman did not use notes. He would probably have done a good deal better if he had made his speech much shorter and had used notes. The majority of it amounted to sheer guesswork and conjecture as to where this £78 million had gone. The only positive thing to come out of his long-winded speech was a promise to set up a committee to study the question of meat marketing. That could be very valuable, and I welcome the decision.

Just before the Christmas Recess, and after the Minister made the announcement of this Supplementary Estimate, many of my hon. Friends and I tabled a Motion criticising him. The criticism was made not of the fact that the £78 million was going to agriculture. My party is in favour of agriculture subsidies.

Mr. Edward du Cann (Taunton)

The hon. Member says that the whole of his party is in favour of supporting agriculture. When I was younger I fought two difficult seats in the Conservative Party's interest which were held by Labour Members of Parliament, and I can assure the hon. Member that my experience of members of the Labour Party is that many of them are very much against support for agriculture.

Mr. Hilton

That may have applied when the hon. Member was young. Like me, he is no longer so young. He may take it from me that my hon. Friends are not opposed to agricultural subsidies as long as they go to the sources for which they are intended. It is when they go astray, as a large part of the £78 million has gone astray, that some of my hon. Friends complain. We all ought to complain if this large amount has gone astray.

We signed this Motion because we contended that the money had gone astray. The Minister admitted this afternoon that it had been a bad bit of underestimation. He was honest enough to admit that. This Supplementary Estimate can be described as the mystery of the £78 million, because nobody will admit having it.

Mr. Percy Browne (Torrington)

It is a known fact that £31 million of it went to the farmers.

Mr. Bullard

To the farming industry.

Mr. Hilton

I am not an authority on farmers, but I can quote one who is—the secretary of the Norfolk branch of the N.F.U., which is not one of the least important branches of that great union. His reaction, about two days after the announcement, was revealed in headlines in the local Press, Which read, "£78 million extra for British agriculture, but the farmers get nothing." I am not saying that he was right. The Minister implied this afternoon, and on other occasions, that £31 million went to the producers. I am saying that this is a guess by the Ministry, and I believe that a figure between the £31 million suggested by the Minister and the nothing suggested by the secretary of the Norfolk N.F.U. is a more accurate figure.

Mr. Prior

I am sure that on reflection the Norfolk N.F.U. secretary would not wish that story to be put out. I am certain that he will admit straight away that £31 million has gone in increased guarantees to farmers resulting from the last Price Review.

Mr. Hilton

I have no wish to intervene in a quarrel between members of the N.F.U. I am quoting the headlines in our local paper reporting the Secretary of the Norfolk N.F.U.

The farmers said that they had not received this money. Certainly the farm workers have not had it. I can vouch for that, because at the identical time that the disappearance of this £78 million was discovered, the representatives of the workers were negotiating an increase in pay for farm workers. After a lot of bartering they came away with a promise of 6s. a week increase in about sixteen weeks' time. They still have not had it, although this was negotiated in November. They will get it later this month.

Mr. Bullard

I am interested in the hon. Member's analysis and I want to get one point clear. He is not quite fair in saying that the farm workers and others in the industry have had none of this money. In the Review, certain increases in prices, which are reflected in the Estimates, were given to the farming industry on account of increased costs—and among these costs were wages. That has nothing to do with the 6s. a week increase, which I admit is a very small increase, but it has to do with past increases in the year before the last Review. It is not quite fair to say that they have had none of it.

Mr. Hilton

We are dealing not with two or three years ago but with the year which has just passed. I agree that increased wages are taken into consideration during the Price Review, but the £78 million arose afterwards.

Those two sections of the industry, farmers and farm workers, claim that they have had no benefit from this £78 million, and the consumer claims to have had very little, if any benefit, from it. The meat traders and the butchers say that they have been passing this benefit to the housewife but that she has not known of it. The Minister repeated that this afternoon. I can say from experience that housewives are not nearly as dim as the meat traders tried to make out and as the Minister implied. I have spoken to many of them. No doubt they have had better cuts, but they have paid extra for them and there has certainly not been a decrease in the cost of living.

My complaint is not about giving a subsidy to agriculture. I am in favour of that. My complaint is that the Minister has failed to ensure that the money has gone to the sources for which it was intended—the farmers, the workers and the consumers. This is a very large sum of money. While I have been in the House in the last three years hon. Members opposite have still joked about the groundnut scheme. This is equivalent to three groundnut schemes, but when the Estimate was brought before the House before Christmas, the Conservative Party unanimously supported the Minister when he asked for this £78 million. My complaint is that a large part of this money appears to have gone astray. The Minister obviously does not know where it has gone. He guessed this afternoon, but he does not know. If it has gone astray, an inquiry should be instituted to find out where it has gone. The House and the public are entitled to know.

I am not alone in that I am desperately anxious that we should have a stable, efficient and prosperous British agriculture both now and in the future, remembering, as I do, British agriculture in the 1920s and the 1930s, when it was sacrificed so blatantly, when hundreds of farmers went bankrupt and when thousands of workers were thrown on the scrap heap and went on relief work. None of us wants to see that occur again. That is the main reason that I am so apprehensive lest the Government take us into the Common Market before we have the assurances which we want for British agriculture. If the Government sell us down the drain and go into the Common Market without getting those assurances, they can expect trouble with a capital "T" from Norfolk. Farmers and farm workers.

Mr. George Lawson (Motherwell)

If the present system brings nothing to the farmers, or very little, what kind of additional assurances is my hon. Friend seeking?

Mr. Hilton

I am asking that money allocated in subsidies to assist British agriculture should go to the sources for which it is intended.

Mr. William Hamilton (Fife, West)

In bigger wages. At present they are National Assistance scales.

Mr. Hilton

I hope that it is the Government's intention to implement the pledge given in the Queen's Speech: My Government are resolved to maintain a stable, efficient and prosperous agricultural industry. I hope that the Government intend to carry out this pledge, because those of us who have the industry at heart want to see them do so. I wonder if the Minister really wants this for everybody engaged in agriculture, farmers and workers alike.

I think we can sum up the situation fairly by saying that there are three categories involved. There are the large farmers who are reasonably all right, there are the small farmers who can still do with some extra help, and there are the farm workers who are definitely not getting their share of the cake. If the Government are to keep the pledge they made in the Queen's Speech, more must be done for the small farmer and farm worker. They are both entitled to and must share in the prosperity which is referred to in the Queen's Speech. The farm workers are often referred to as partners in agriculture—and not just sleeping partners, but very active. Look at the record of increased production. There has been a 70 per cent. increase since the war.

I suggest that in future Estimates the Minister should implement this pledge and provide money for agriculture to bring the wages of the farm workers up to those of industrial workers. Their status is already up to the level of industrial workers, but their wages are not. I know that wages are fixed by the Agricultural Wages Board. I am not suggesting this should be changed, and I do not want to get out of order by going into that, but it is an important matter. Farm workers are partners in this industry. They play an important part in it, and I claim that it is the responsibility of the Government to ensure that sufficient money is in that industry in order that they may be paid a decent wage.

At the Conservative Party conference a few months ago the Prime Minister said that the aim of the Tory Party and of himself was that wages in this country should be up to £20 a week in ten years' time. Fair enough. Farm workers at present are receiving £8 9s., with a promise of 6s. extra at the end of this month. That is a long way off £20 a week. We want not just dreams for the future but a bit of activity now. I repeat, the farm worker is still not getting the justice to which he is entitled. The position must be rectified, and it is the Government's responsibility to do so.

8.23 p.m.

Mr. Percy Browne (Torrington)

I was surprised that such a knowledgeable person in agriculture as the hon. Member for Norfolk, South-West (Mr. Hilton) should come here not knowing his facts and not knowing the exact sum out of this extra Supplementary Estimate which has, in fact, gone to the farming industry. I was also surprised to hear him say that his party was entirely in favour of subsidies for farmers. [Interruption.] It was at a moment when the hon. Member for Fife, West (Mr. W. Hamilton) was not in the Chamber.

Mr. W. Hamilton

The hon. Gentleman has never yet heard me say that I was against farming subsidies. I am against the principle of indiscriminate distribution of them. The Government continually get on to their feet, both collectively and individually, and say that housing subsidies must be given to the people according to need. That is exactly what I want for farming subsidies.

The Temporary Chairman (Mr. Malcolm MacPherson)

I think I should say that I am against the principle of extending this debate too widely, to the subject of general agricultural policy.

Mr. Browne

I apologise, Mr. MacPherson. It was an opportunity for which I had been waiting for a long time.

It is a little awkward at this stage in any debate to say something new. My hon. Friend the Member for King's Lynn (Mr. Bullard) and I did not sit next to one another when we decided what we were going to say in this debate, but when I looked at my notes just now I thought we might well have been doing so.

The problem that we have got to face is how to maintain the present system. I cannot agree with the hon. Member for Workington (Mr. Peart) that the system has broken down. Undoubtedly it is under pressure. On the one hand, where the price in the market has dropped it has not dropped fully to the consumer; and secondly, the cumbersome anti-dumping legislation has not had the effect it should have had of protecting the producer and the taxpayer. Therefore, the question is what should the Minister and the National Farmers' Union do to make this system work?

Before suggesting a few solutions, so that we do not have a Supplementary Estimate of this size again, I must make one thing absolutely clear. I believe that as a basis there must be some form of effective control of the food market in this country if our agricultural policy is to succeed. There are, therefore, two essentials—first, that we must have some control over imports—I should like to describe the method in a moment—and secondly, that we must have better marketing of meat in this country.

I should like to see the Government set up, in co-operation with the N.F.U., a committee composed of members of the N.F.U., of the Board of Trade and the Ministry of Agriculture, Fisheries and Food, whose job would be to coordinate imports and home production, to study carefully trends of home production, to be in a position to stop the import of food with a more up-to-date anti-dumping law, and be able in particular to prevent the import of food from non-traditional suppliers to this country if it became apparent that it was going to upset our home market. As an example of the trend over the past few years, during the last seven years this country has absorbed in its markets 1,000 million gallons of milk equivalent. Of this amount, 67 per cent. has been from imports, and of that 67 per cent. only 38.5 per cent. came from Commonwealth countries.

I wish to echo what my hon. Friend the Member for South Angus (Sir J. Duncan) said, that to enable the committee which I have suggested to be effective there must be a revision of our anti-dumping legislation. The Estimates Committee in Chapter 16 of its Report mentions this. The essential is swiftness of action. It is not good enough to wait for the applications to be submitted with all the supporting evidence, if in the meanwhile material damage is being done in particular to the taxpayer who has no one to bat on his behalf except those of us in the House.

With quick and effective anti-dumping legislation, and with this committee of experts who would have power to stop supplies from non-traditional suppliers, I believe that we should be some way towards preventing a Supplementary Estimate of this order in the future. If we do have effective anti-dumping legislation and control of imports, the question arises whether this will be detrimental to the consumer. I believe that the answer is "No", for not only is chaos on the home market to no one's advantage, not only are wildly fluctuating prices not to the consumer's advantage, but a depressed home agriculture is undoubtedly a disadvantage to the country as a whole.

Complementary to the effective control of imports, there must be better marketing of meat in this country. The alternatives are either a meat marketing board or large commercial organisations set up to provide the retailer with the type of meat he wants at the right price. The object of the exercise, in any case, is always to get the product as cheaply as possible from the producer to the consumer.

It has been obvious from the speeches today that many hon. Members have been trying to discover what has happened to a large amount of the Supplementary Estimate which has, undoubtedly, been lost along the way. The N.F.U. is urgently considering the problem of setting up a meat marketing board with statutory powers. Any such marketing board must have teeth if it is to work efficiently, and the Devon branch of the N.F.U. has been pressing for the setting up of a board with such powers. While it is considered to be a doubtful political starter, the Milk Marketing Board—a statutory body—is already in being and has not turned out to be a usurper of its powers. It sells its products to the distributor and the manufacturer and provides them with what they want when they want it.

There is no doubt that a board which could deal with a large variety of meat products and market them efficiently would have an extremely difficult job; but, whether or not meat is sold through a board or through the commercial channels, there are three essentials. Firstly, the organisation must be big enough to provide supermarkets with a graded quality; secondly, if there is a situation where it should be necessary, the organisation must be able to freeze or chill meat and store it when it is not required; and, thirdly, it must be able to process parts of the animal which are not easily saleable.

There are classic examples of commercial enterprises which are doing this; tailoring a pig from start to finish from the moment it enters to the moment it leaves the factory. While the small butcher often does a fine job, the farming industry has a large part to play in the making of marketing arrangements and there must be greater cooperation. Farmers are fully aware of this, and they are setting out to improve their marketing arrangements and the quality of their produce. They are making energetic efforts to this end. Eventually the only sensible answer will be a dead-weight and grading system, and I hope that there will be greater emphasis on this in the future.

Meanwhile, I hope that the N.F.U. will draw up a blueprint for a fully-fledged Meat Marketing Board so that if its commercial enterprise does not work—and I hope that it will—it will be able to come to Parliament and ask for these statutory powers.

There are other ways in which we may be able to prevent this large Supple- mentary Estimate recurring. We must both try to avoid large Exchequer contributions and endeavour to narrow the gap between producer and consumer prices. To this end, it must be right that the December returns of stock on farms should be used for the February Price Review and not the September returns. Anyone who looked at the December returns in 1960 saw that there was bound to be nearly two years' killing of fat-stock instead of an even spread over 1960 and 1961. Many animals did not come forward in the autumn of 1960 and that increased the home killing in 1961.

This point is discussed by the Estimates Committee which also suggested the possibility of the provisional Estimates coming out after the Price Review. The Committee states that this is impracticable, but it is obvious that any plus award will almost certainly be reflected in a Supplmentary Estimate with a resulting uninformed but damaging criticism of the industry. The Minister could help by altering the guarantee schedules at normal peak killing periods to encourage farmers to hold stock off the market.

Fat lambs are an example. It is a fair assumption that the market can absorb about 250,000 lambs a week, yet the schedule is so worked out that during the glut period of September and October this is what happened; in the week ending 8th October, 1961, 407,300 fat lambs were on the market at an average price of 37¾d. per lb. with a subsidy element of 1s. 7½d. yet in March, 1961, there were 117,700 lambs brought forward at 44¼d. per lb.—only 6d. up—yet the subsidy element was 8d.—a drop of nearly 1s.

I am, by these arguments, trying to reinforce what was said by my hon. Friend the Member for King's Lynn who suggested that the schedule in the Price Review should be altered in the same way as that for milk, to encourage farmers to keep lambs and handfeed them until later in the year.

On the question of narrowing the gap, I suggest that there is every good reason for setting up a meat working party, the object of which would be to give up-to-date information to consumers of the realisation price in the market at any given time, and the sort of price which housewives would be expected to pay in the shops for their meat. The position at the moment is that the average consumer, quite rightly and understandably, has no way of knowing the market price, but, suddenly, the public and the country are presented with a bill for £78 million. Everybody says that it has gone to the butcher, the farmer or somebody else, and we all want to know where it has gone. We want to produce consumer resistance, and we can do that if the housewife is given a realistic guide to the sort of prices she should pay.

The Committee will note, and I hope that the Minister in particular will, that the suggestions I have made are aimed at protecting the taxpayer, while allowing the farmer to have the reasonable standard of livelihood which he was guaranteed under the 1947 and 1957 Acts, and also making sure that any drop in market prices is reflected to the consumer. The Minister will also notice that none of the suggestions, which I think are practical suggestions, necessitates a cut-back at the next Price Review. I very much hope that my right hon. Friend will not use anything said in this debate, and the Supplementary Estimate which we are discussing, as an excuse for taking the maximum cut, or, indeed. any cut, in the form of the subsidy bill.

There is a lot more that I wanted to say, but other hon. Members on both sides of the Committee wish to speak. In conclusion, I agree to a great extent with the hon. Member for Norfolk, South-West, who said that we should give more help to small farmers, because I believe that we have many social problems to face in our village life and in the life of the countryside generally. I would say to the hon. Member for Fife, West (Mr. W. Hamilton) that there are practical suggestions which he and I could discuss on how the subsidy could be better weighted towards helping a person on limited acreage, not necessarily those on large farms.

On that, I agree with him entirely. The report by Professor Zuckerman, "Scale of Farm Enterprises", shows that the income of the small farmer has certainly not gone up in the last few years. That cannot be for the good of an industry which has been contributing a very great deal to this country. To give one figure alone, increased efficiency has meant an annual saving of £300 million in our balance of payments. I should have thought that it was the job, not only of the Minister but of the Committee generally, to ensure that farmers and, therefore, farm workers, get a fair crack of the whip and a decent standard of living. I sincerely hope that this Supplementary Estimate will not be used to take a cut from them at the next Price Review.

8.38 p.m.

Mr. Harold Davies (Leek)

The Committee listened with interest to most of what was said by the hon. Member for Torrington (Mr. P. Browne). He accused my hon. Friend the Member for Norfolk, South-West (Mr. Hilton) of not knowing his facts, when my hon. Friend, like most of us, did not want to reiterate what everybody else had said, or to take up time in saying things that had already been said.

Nevertheless, we are grateful because one or two bright new ideas have been put before the Committee, one of which, perhaps without pomposity, I can say I had thought of myself. It concerns this business of getting the housewife to build up consumer resistance, and to learn exactly what the price should be and value the right pieces of meat to buy in the butchers' shops.

Those of us who were brought up in country households were accustomed to seeing our grandmothers or mothers with old-fashioned cookery books. Many people make fun of them, but they did know the best pieces and the best foodstuffs to buy, as well as being able to judge quality. Sometimes, they knew that even the cheapest meat, if properly cooked, could make the most delicious dishes. I think that here is a way in which the housewife, as a consumer, can help the country to keep prices stable.

I do not wish to repeat what has already been said about the Estimate, but I think that there are a few other things which should be said. I do not wish to appear too politically-minded, but I must point out that the problem of agriculture is indicative of the whole of our economy. We have a social system where value is placed on money. We were told that the party opposite would protect the £. Whether it be in respect of mining, agriculture or any other enterprise, if we are not sure about the stability of our money and Government policy in that regard, there will be a shadow over everything, including agriculture.

I do not wish to go into the question of the problems relating to the Common Market. We are not discussing the Common Market, but we should be hiding our heads in the sand if we pretended that British agriculture was not concerned about the Common Market, or if we did not consider this Supplementary Estimate and the Common Market in relation to the meeting to be held at Geneva tomorow between those members of the G.A.T.T. and the French Quai d'Orsay which is interested in this matter, together with Canada, Australia, New Zealand, Britain and the Six. There is a meeting tomorrow at Geneva to discuss the French plan——

The Temporary Chairman

Order. I have difficulty in relating what the hon. Member is saying to this Supplementary Estimate.

Mr. Davies

I will come right into order in one moment, Mr. MacPherson, because this business of imports and market prices—I had better put myself in order quickly—is something with which we are concerned. The conference tomorrow will deal with that problem. The experts from the Treasury are not sure how to regard the plan. They will be concerned about wheat and about plans for wheat and other commodities in the Commonwealth. I think that I am in order now, Mr. MacPherson.

The Temporary Chairman

I understood that the hon. Member was trying to get back in order. Perhaps he will try a little harder.

Mr. Davies

I wish to point out that not only is there the question of the Common Market but also these international discussions about commodity any food prices, about which all hon. Members are concerned, as well as every one interested in the industry.

We must be fair to the Minister and to the Government. It is difficult to obtain accurate estimates when dealing with imponderables such as the weather. We cannot judge production or what the climate may do. I do not wish to attack the Government unfairly, but I would remind them, very gently, that when the party of which I am a member was in office there was a glorious afternoon when I sat behind the Minister, and somebody thought that I was a Parliamentary Private Secretary. At that time the then Labour Government were being attacked over the groundnut scheme and the uproar over that plan, which was designed to increase food production, was wicked. But today the Opposition have dealt with this matter intelligently because hon. Members on this side of the Committee are concerned about the future of agriculture. I am glad that there has been such an atmosphere in this debate.

I do not think it right to make a scapegoat of the butcher. It is no good looking for scapegoats in this matter. I agree with my hon. Friend the Member for Workington (Mr. Peart). It is the system which is wrong. When a system is wrong, human nature being what it is, people take advantage of the weaknesses of that system. That can be understood because ordinary people are not saints.

If it is thought that we can build up an efficient agriculture and an efficient marketing system, I put in one word of warning. There are 155,000 farms in Britain which are worked part-time. They produce a vast amount of food. In my area there are 1,400 farms of 20 acres and less but those working on them find in that their way of life. There is more in life than efficiency. Most of the efficient men I have known have been some of the most miserable devils one could meet. They have a card index mind and can run through a line of figures.

Mr. Emrys Hughes (South Ayrshire)

And duodenal ulcers.

Mr. Davies

Yes—and duodenal ulcers, and they never smile. The late Nye Bevan once said that when people start dealing with figures and papers they should realise that they are dealing with human beings. There is much more in life than efficiency; there is human happiness and a way of living.

Therefore, whatever we take from this Estimate, do not let us make a scapegoat of agriculture and clamour for a system of efficiency by which we say we shall get more and more food production from fewer and fewer farms. If people want this way of life in which they can get out into the fresh air and live a good, clean life, no Government or party of whatever political colour has the right to move them off the land en masse or to make an economic situation in which they have to leave the land. Any Government or party which thinks or advocates that will meet with opposition from the small farming fraternity and also the big farming fraternity and the rural areas.

As nearly everything that can be said has been said about marketing reform, it would not be wise of me to try to cross the t's and dot the i's, but I think the Committee is knowledgeable enough to accept the need for some kind of marketing reform. Although it is only a palliative and in 1959 the National Farmers' Union suggested an interdepartmental working party to look into this question, we welcome the statement ably made by the Minister when he promised that some kind of committee would be set up to look into it.

What else can one say that is new? I point out something which I think the Committee has forgotten. In the rural, farming areas people always say, "We don't want to be governed from Whitehall", but it is time they took a greater share in governing themselves in the local authorities. Often farmers on parish councils, rural district councils and county councils are among the most reactionary in opposition to improvement of country roads and approaches to farms.

I must be careful about this. The Jacks Committee on Rural Transport reported that a third of a million miles of country bus routes were cut out last year. If we want efficient and constructive farming it is absolutely necessary that road and rail services should be efficient. We cannot have a marketing system if road and rail services which should serve it are closed down. There is a fundamental need to look into that question.

If we want a marketing system, it may mean refrigeration on our farms. Therefore, we want electricity and water supplies as never before. In the modern marketing era, with a refrigeration system on every farm, both meat and vegetables could be kept for marketing.

On both sides of the House of Commons there is an intelligent appreciation of the need for British agriculture and the fact that it saves the country £300 million a year in our balance of payments. There is an intelligent appreciation of the need for the countryman and the farmer in the British way of life. Tonight, therefore, the Committee should not, because of the Supplementary Estimate, let down the small man, who has been the backbone of British democracy throughout history.

8.51 p.m.

Mr. J. M. L. Prior (Lowestoft)

There has been general agreement in the course of the debate that we must not do anything to let down the home producer. I am glad that the hon. Member for Leek (Mr. Harold Davies) addressed himself to that fact. I hope he will forgive me if I do not follow his remarks, as time is short. He spoke, however, about imports, on which I want to make my first point, which relates also to the contribution made by British agriculture since the war to the balance of payments.

This year, in the context of meat, our total imports have been down, but we have imported meat from some of the most extraordinary places. The imports from Yugoslavia, for example, are up by £5 million. I regard this as completely necessary. We have an imbalance of trade with Yugoslavia of an exactly similar amount.

One of the most striking comments on the British economy since the war has been that when we have got into balance of payment troubles we have found it far easier to cut down our imports than to expand our exports. I should have thought that agriculture could make an even bigger contribution in producing more food at home, which would have the effect of decreasing the amount of imports, especially from countries like Yugoslavia, with which we have a trade imbalance.

I hope that the Government will take much stronger steps that they have done so far to stop not only the indiscriminate dumping of imports, but the indiscriminate purchasing of imports which do terrific harm to our agriculture and are largely responsible for the high deficiency payments that we are discussing today and, no doubt, will discuss after the Price Review later this month.

I have tried to look at the problem of meat marketing without fixed political views. I have re-read the Report of the Lucas Committee. I have considered having the Government as a residual buyer which could buy up the surplus which is not easily disposed of through the open market. I have looked at both those points, but I have not come to the same conclusion as certain hon. Members opposite. Having the Government as a residual buyer is an attractive proposition in many respects. It would mean that the situation last summer, when too many cattle came on to the market together, could be overcome. The Government would step in at a fixed price and take off the surplus from the market. They would then have to slaughter the animals and store and freeze them.

The result would be that the free enterprise system in which the meat market works would not buy those animals until it suited it to do so. It would buy them at extremely low prices and the result would be that the subsidy would cost the Government more money than under the present system.

Before the hon. Gentleman the Member for Enfield, East (Mr. Mackie) interrupts me, because I know the point he is going to make, I would say that I remember well the Ministry of Food being responsible for barley marketing, and I think it was in the last year before decontrol of barley that what, in modern terms, was a very small quantity of barley, under 1 million tons, cost £40 million to the Ministry of Food. I can well visualise the same sort of process happening with meat.

Mr. Mackie

Is not a free enterprise system a system where the Government do not interfere? Immediately they do, does it not cease to be a free enterprise system?

Mr. Prior

Yes, but I was talking then about barley, not cattle.

It would be a very attractive proposition to save the Government some deficiency payments. I think, indeed, the hon. Gentleman will agree with me about this, that unless we nationalise the whole thing it could not possibly be made to work.

I think there are some things the Government could do to save themselves some money and to improve marketing pretty quickly. I myself believe that we have got to get away much more from the livestock auction system for marketing, and I believe that it could be done fairly easily and without compulsion of any sort whatsoever. At the moment the average farmer likes to send his cattle through the auction. He can there see them being graded, he can breath down the back of the grader while he is doing it, and he can ask him some awkward questions afterwards if the cattle have not been graded as he wishes; and he, particularly the good farmer who sends his cattle to the auction market, generally gets a better grade, and therefore a better price, than the farmer gets who goes through the Fatstock Marketing Corporation or whose cattle are killed and graded on a deadweight basis.

I myself begin to doubt the advantages of grading at all. I would think that the time is coming when we should consider grading, as it were, entirely on price. It is not always nowadays, anyhow, the cattle which are graded according to the grader which get the best result. I cannot see why we should not consider a system of grading entirely by price. We should still have our average price as it works at the moment, but then for cattle which obtain less than the average price we could start to deduct subsidy. I think, for example, that if the average price were £7 cwt. and the guaranteed were £8 cwt. there would be a £1 cwt. deficiency payment. If the price of a bullock in the market were only £6, instead of getting £1, as one would now, I would have thought it possible to reduce it to 10s. For cattle making a low price in the market there would be a very low subsidy.

I think that that would encourage farmers to contract forward and to send their cattle to modern slaughterhouses and abattoirs. It would detract from the present advantages of the auction system and would, I think, give to the industry generally a chance of developing slaughterhouses, which are very much in need of altering from the present setup, and would give a chance for that to be done without altering the economic background of the industry. I hope that my right hon. Friend will consider whether that is possible.

I do hope that this committee which he is setting up will be successful. I think we have all under-estimated today the very great difficulties in marketing meat. It is no good talking about meat marketing in the same way as one talks of the Milk Marketing Board, because there is all the difference in the world. A group of us on this side of the Committee spent the whole of last winter examining what changes might be made in the set-up for meat marketing. I must be quite frank and say that at the end of those discussions we were very little further forward than we were at the beginning. I rather fear that this committee which is to be set up may come to the same conclusion, because this is an extremely complex marketing system, and I suggest that all we can do is to carry on as we are at present, trying to bring in small changes wherever we can to the existing system, but sticking by that system, and thus, in the long run, giving the consumer meat at the cheapest cost and the farmer the best guaranteed price for his products.

9.0 p.m.

Mr. James H. Hoy (Edinburgh, Leith)

We have had a very interesting debate today. The speeches covered a very wide range and some of them contained valuable suggestions for not only the Government but the whole Committee to consider.

I should like first to single out the maiden speech of the hon. Member for Fife, East (Sir J. Gilmour). It is customary to pay tribute in the House of Commons to maiden speeches. I assure the hon. Member that on this occasion I am not doing so in a customary fashion. I am paying a warm tribute to a speech that was not only well worth while but which contained many valuable suggestions which the Government might well ponder. It certainly contained suggestions which have not met with the Government's approval so far. Indeed, when I heard the criticism and the rational approach made by my hon. Friend the Member for Workington (Mr. Peart) and then listened to the rational approach being made by the hon. Member in his maiden speech, I felt that he had far outdone my hon. Friend. It was a first-class speech and we shall look forward to the hon. Member taking part in our debates on many occasions in the future.

I turn to the speech made by my hon. Friend the Member for Workington in opening the debate. I thought that it was a first-class speech, but it was interrupted by hon. Members opposite in what appeared to be a concerted fashion and, even worse, having done that, they left the Chamber and have not appeared since. The least they could have done was to extend some courtesy to the Committee. Having made interruptions over a considerable period, they should in fairness have paid some attention to the debate that followed and not just confine their attentions to the opening speech.

During the speech made by the hon. Member for Aylesbury (Sir S. Summers) and the interruption by the hon. Member for Farnham (Sir G. Nicholson) in the speech of my learned Friend the Member for Workington, apparently, they were seeking to detract from the Report of the Estimates Committee and to criticise my hon. Friend the Member for Workington on what he had said. Let me remind the Committee once more that my hon. Friend was only quoting from paragraph 20 of the Estimates Committee's Report. That Committee stated: Your Committee are concerned that this process has, in the opinion of the Department, operated so ineffectively. I should have thought that if anyone went through the Report fairly, he would have come to the same conclusion. Running through the whole of the debate, we have had speeches from both sides of the Committee making suggestions about how the position ought to be met. There was some little criticism, perhaps, of the position of the Labour Party vis-à-vis agriculture. I think that we should put it on record once more that if agriculture is thriving today, and it is certainly much better than it has ever been before, the foundation for its success was laid by a Labour Government in 1947. When hon. Members opposite are inclined to be a little supercilious about those taking part in the debate, let me remind them that it was a British miner, who was then Minister of Agriculture, who made this a possibility.

If we go back to 1953 we go back to what was the start of this debate when the Government introduced their White Paper on the Decontrol of Food and Marketing of Agricultural Produce. On that occasion my hon. and right hon. Friends expressed their misgivings, to put it no higher, about the Government's proposal to decontrol prices without some adequate control over importations. My hon. Friend the Member for Hamilton (Mr. T. Fraser), speaking in Committee on that occasion, quoted from an article which had appeared in the Observer the previous day. Faced with the bill which we are asking the taxpayers to pay this evening, it is interesting to recall that the Observer said on that occasion that the Government by their action …revives the absurd guessing game of livestock auctions and underwrites them with an unlimited Treasury guarantee, thus throwing the meat market open to the speculators, dealers and price rings which battened on the industry before the war. That was comment in the Observer prior to the 1953 debate, and when hon. and right hon. Members opposite accuse some of my hon. Friends of using extravagant language I wish that they would read not only the Press comments of that day but some of the speeches delivered in the country by hon. Members opposite.

I quote one example of what was thought of this at that time by the hon. Member who then represented East Aberdeenshire but who now adorns another place. He said that he was not prepared to see the livestock producers of Scotland thrown to the wolves of Smithfield in the name of a free market. He went on to say, and this is important in view of this debate: We have to accept the fact that this is a temporary scheme, designed primarily to give us time, but not at the expense of the farmers."—[OFFICIAL REPORT, 9th November, 1953 Vol. 520, c. 661.] I am certain that we can all agree about that. Whatever has happened, it has not been done at the expense of the farmers, but what has been worrying some of my hon. Friends is that it has been done at the expense of the consumer and the taxpayer, though it may be that the farmers are one part of that group.

As a result, we are faced tonight with having to find an extra £78 million to meet this deficit. That is why we want to know what was meant by "temporary". How long is "temporary"? If this proposal was introduced nine years ago and we have had the result with which we are faced tonight surely the temporary period is passed. All we ask is that the Government should take some action to deal with the matter. We have made it perfectly plain that we think it right that agriculture should be supported, but surely we should have some control over where the money is going. This is a question with which I am sure the Public Accounts Committee will want to deal. In addition to what the Report of the Estimates Committee said and what has been said in this Committee today, many questions still remain unanswered.

I raise this point because in the many years during which I have served on the Public Accounts Committee we have always been able to say where the money has gone. It is true that sometimes we have not all agreed where it has gone, but at least we have known which direction it has taken. On occasion, the Committee has had to question agriculture estimates in this light.

I was interested in a point raised by the hon. Member for Edinburgh, West (Mr. Stodart) in an interjection. He accused my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) of saying that many farmers have had their fertilisers paid for them, getting them free. My right hon. Friend carefully explained that it was that part for which they did not pay that they got free. This is not the first occasion on which we have had a case of this kind before the Public Accounts Committee. Indeed, two or three years ago, as the Secretary of State may remember, there was the case of a very canny old Scots farmer who, in the change-over of prices for fertiliser, managed to get the Secretary of State to pay 110 per cent. of his cost. It caused the Committee some concern that this farmer got 10 per cent. on top of what he had paid.

Thus, this situation is not new, and I commend to the hon. Member for Edinburgh, West that what we were doing in the Public Accountants Committee then was seeking to safeguard the taxpayer's money. After all, it may seem strange, but this is the taxpayer's money we are paying out. That is important, and that is why we are dealing with this subject tonight. Every penny must come from the taxpayer.

Last year we also had before the Committee a number of cases where, although ploughing-up grants were paid, no ploughing up took place. We were able to get some of the money back. Indeed, I always thought that it was a little reprehensible that the only man who was ever prosecuted and imprisoned was a civil servant, while the people who got the money were allowed to go scot-free on repayment. But, in any case, we did discover where the money had gone. The difference between this case and those cases is that we have still to find out where the £78 million has gone.

Mr. W. Hamilton

Groundnuts?

Mr. Hoy

I may come later to what my hon. Friend says.

We have had meetings upstairs with representatives of the butchers, consumers and farmers. They are all agreed that they did not get anything out of this. There is no quarrel between them on that. Apparently they all got nothing. The farmer would, I think, admit what was said by one hon. Member opposite—that he got no more than that to which he was entitled, which was the difference between what the market produced and the guaranteed price. Thus, for his labour the farmer, at the end of the day, did not get a penny more than the guaranteed price for his animal.

The butcher insists that he got no great amount more profit. Today the right hon. Gentleman produced figures which showed us that the price of meat had decreased between 4 per cent. and 20 per cent. and over, but he was careful not to say that the 4 per cent, applied to the best quality meat and that the more substantial reductions applied to scrag ends. In other words, he said that we were quite free to choose: if we could not have bread, we could always take cake. That does not seem a very reasonable argument when one remembers the considerable numbers of people—old-age pensioners and others—whose incomes are so low that they are limited in choice in the butchers shops; indeed, in many cases, they have no choice at all.

What we have to consider this evening is where this sum of £78 million has gone. Everybody has admitted that it is a very large sum of money. Scotland's share of it is approximately £13 million. It is a matter of regret that the Secretary of State for Scotland has never seen fit to make any statement about that substantial sum. When the right hon. Gentleman the Minister of Agriculture replied to a Private Notice Question about the Supplementary Estimate, I endeavoured to discover why the Secretary of State for Scotland was not present. I do not know why the right hon. Gentleman smiles. He has as much responsibility for this Supplementary Estimate as his right hon. Friend.

This is a substantial sum when it is remembered that there are about 67,000 full-time farm workers in Scotland, so that this sum which is going to the Scottish farmers would pay every Scottish farm worker an extra £1 a week for the next four years. It is not an insignificant sum. Unfortunately. if we suggested to the Chancellor of the Exchequer that this sum should be found for an increase in farm workers' wages and not for the bolstering up of prices, he would say that that was inflation and that the Government could not tolerate inflation. But this is inflation because the money has to be found by the taxpayer.

What is made perfectly clear by the Report of the Estimates Committee is that it may be a matter for the Public Accounts Committee. The Estimates Committee has confirmed what my hon. Friend the Member for Workington said this afternoon—that the system has never worked—and one has only to read the Report of the Committee to have that proved. Paragraph 3 of the introduction to the Report says: …in 1956–57 an excess of £18 million on eggs was balanced by a saving of £17 million on milk; in 1960–61 an excess of £10 million on barley was balanced by a saving of £10 million on sheep. Errors of over 100 per cent. on individual subheads occur frequently; examples can be taken at random for most commodities in every year since 1955…A large net sum is required by the present Supplementary Estimate because…almost ever subhead has shown a deficit. That proves two things—first, that the present system is far from satisfactory, and secondly, that Parliamentary control over this type of expenditure will have to be carefully studied.

One of the interesting things about the Report of the Estimates Committee and why I have suggested that the matter should go to the Public Accounts Committee is that we have a system known as virement which is a system wherein Departments can transfer surpluses under one head to meet deficits under another. This is a system upon which the Treasury and the Public Accounts Committee have always frowned. It has been said that if there are deficits there ought to be some appearance before Parliament to ask for the differences, but in this scheme there have been tremendous deficits nearly every year and only by a saving on some other subhead has it been possible to balance the account. I am sure that if in any year an hon. Gentleman opposite who was running a business found that these substantial losses were being made in one section of his business he would not call it a day merely by transferring that loss to another section of his business which had been more profitable. He would want to discover the reason for the loss.

The Committee this afternoon, and the Estimates Committee, have not been able to discover where this money has gone. We are, therefore suggesting that it might be worth while having this Supplementary Estimate examined by the Public Accounts Committee to discover where the money has gone. It could summon witnesses from every section of the industry—farmers, producers, and butchers—and examine them. It has power to do this, and perhaps the Public Accounts Committee will consider this suggestion and put it into practice.

The present system is unsatisfactory. I think that a fair comment about it was made by a distinguished Scottish farmer, who I am sure would meet with the approval of hon. Gentlemen opposite. He is Mr. J. G. Jenkins, the immediate past-President of the Scottish National Farmers' Union, who farms near Cambridge. Addressing the Oxford Farming Conference, he said: We need to ensure that we get a fair and reasonable price for our product at the farm gate. This we are palpably not getting and anyone who says it doesn't matter because we have got deficiency payments to make up the difference, is either a fool or a rogue. That is pretty strong language, and not from this side of the Committee. He went on to say: What I am convinced of is that we do not want a free market structure which has had appalling results for primary producers. Freedom is a wonderful word for propaganda purposes. That seems to sum it up, and we have to consider what to do if this system has failed. It obviously has, otherwise we should not be faced with this Supplementary Estimate. Further, we should not have had the last-minute suggestion of the Minister of Agriculture, Fisheries and Food, backed by the Secretary of State for Scotland, to set up a committee to look into this problem and the whole question of marketing. Had this not been a last-minute thought, the right hon. Gentleman would have been better prepared today than he was, and he might even have been able to tell us the name of the chairman, but of course that is asking too much.

As long ago as 1953 my hon. Friend the Member for Hamilton told the Government that if we had a system of deficiency payments in a free market sooner or later we should run into trouble. The Estimate proves that we have been running into trouble all along the line, and that the day has been saved only by savings in one Department offsetting losses in another.

It is not for us on this side of the Committee to formulate plans for dealing with this problem. That is not the point at issue tonight. What we are considering is what the Government intend to do in this matter, and if any hon. Gentleman is frightened of having a real marketing scheme let him consider the proposals made by the National Farmers' Union and by the National Farmers' Union of Scotland. They are not frightened of an examination of this subject. In the concluding paragraph of its statement the National Farmers' Union says that: In putting the present emphasis on producer commercial development, the Union intends also to embark upon a fresh examination of the possibilities of a statutory meat marketing scheme. The N.F.U. is facing the problem. According to a Press release, the report of the National Farmers' Union of Scotland also advocates a meat marketing organisation and, perhaps, a marketing scheme. That is all that we are asking for—a scheme which would guarantee a fair price to the farmer, because he has to produce the goods and he is entitled to make a good living out of it.

At the same time, two other things must be done. First, the position of the workers in the industry must be recognised; just as the farmer has a good income so must the farm worker have a good wage. Secondly, we must remember our responsibilities to the consumers. We must look after the interests of the industry—the farmer and the farm worker—but to the same extent we must look after the consumers, who at the end of the day must pay. The consumers object to this Estimate, because they have already had to pay high prices; now they are expected to bear additional taxation to meet the losses.

It is because this situation has arisen as a direct result of Government action that we must register our objection in the only way we can tonight. Nevertheless, I hope that many of the suggestions made during the debate by Members on both sides of the Committee will be taken seriously to heart by the Government. No policy of laissez faire will solve the situation in which we find ourselves.

9.27 p.m.

The Secretary of State for Scotland (Mr. John Maclay)

The first thing I want to do is to add my congratulations to those which have already been offered to my hon. Friend the Member for Fife, East (Sir J. Gilmour). His was an admirable maiden speech. I understood the meaning of his opening remarks. He had two hurdles to get over which not all of us have when we make our maiden speeches, difficult as they are. First, he is the son of a father who was greatly respected by everyone privileged to know him, who played a great part in the work of the House, and who gave great service to the nation, and, in his years as a Secretary of State, to his own native land. Secondly, my hon. Friend followed, as Member of Fife, East, an hon. Member who was a great friend of mine—Sir James Henderson-Stewart—who spoke on many subjects in the House, and very often on agriculture. With those two hurdles overcome, we can say with some certainty that my hon. Friend has made it absolutely clear that he follows in a great tradition wth great skill, and we look forward very much to hearing him on many occasions in the future.

My hon. Friend did something which I have seldom heard done in a maiden speech; he put forward many constructive suggestions. The hon. Member for Edinburgh, Leith (Mr. Hoy) suggested that they were not entirely in support of the Government. I remember when I spoke in the by-election for Fife, East, which brought my hon. Friend into the House——

Mr. Ross

He got here in spite of that.

Mr. Maclay

If I had known that the hon. Member for Kilmarnock (Mr. Ross) was here I would have said that my hon. Friend got here in spite of that. From all my past knowledge of my hon. Friend, I am sure that it was a great mistake for me to encourage him to come into this place, speaking from the point of view of the Secretary of State for Scotland, because I am sure that he will put many more constructive suggestions to me, and he will not by any means always be in agreement with me. I hope that my hon. Friend will forgive me if I do not pick up the suggestions in detail and deal with them.

This also applies to a number of suggestions made by hon. Members on both sides of the Committee, and in particular by my right hon. Friend the Member for Guildford (Sir R. Nugent), who made an admirably lucid speech, including some constructive suggestions. I am in the difficulty that a number of the points raised touched on the Price Review, which is developing at present, and it will not be possible for me to go into any detail about our views on the various points raised.

I was criticised by the hon. Members for Workington (Mr. Peart) and Leith for not having spoken on the Estimates before now. The right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) said that I was in the habit of keeping quiet whenever I could. That is not a bad motto for the Secretary of State for Scotland, but it is not one which I normally follow. I took the trouble last year to do a quick check, and I discovered that in three months I had on thirty-nine occasions inflicted myself on the public in some form or another, including speeches in the House. I therefore do not accept the charge that I never say anything about what I am doing. I feel that thirty-nine times in three months is quite enough to get on with.

The detail of the Scottish figures are on page 16 of the Supplementary Estimates for all to see, and I do not think that I could have added very much to them. The reasons for the Scottish Estimates varying as they have, and the need for the Supplementary Estimates, are substantially the same as those for the English Estimates, and I do not see how I could have added anything of interest to the House by making purely repetitive statements.

My right hon. Friend the Minister of Agriculture explained how the need for the Supplementary Estimates had arisen. It was mainly because of a series of developments in the fatstock market last year, and particularly the first half of the year, each one of which in turn tended to depress the general level of prices for different kinds of livestock.

It might be helpful if I recapitulate a little of the debate, even if it involves a certain amount of repetition of points on which hon. Members have touched in one way or another. My right hon. Friend also explained in some detail the features inherent in the guarantee system and in the timing of estimates which make it virtually impossible to forecast with any degree of accuracy the amount of money likely to be needed to meet the guarantees in various products.

Among the slashing attacks which he was working himself up to as hard as he could, the hon. Member for Workington accused my right hon. Friend of gross inaccuracy and gross miscalculation. He cannot have it both ways. In part of his speech he paid tribute to the work of the Estimates Committee, and he implied that the Committee had done its job very well. He went on to accuse us of gross miscalculation. I have made it clear why imponderables arise which make accurate estimating extremely difficult, and the Estimates Committee made its view on the matter clear. The fact is that in most years, despite great difficulty in forecasting, the variations in the different estimates have reasonably well cancelled out. The hon. Member for Leith fastened on this as a very bad thing, but I suggest that if we are dealing with a whole range of commodities of the kind with which we have to deal in this subject, it would be very surprising if we got them all dead accurate. I believe that it would be virtually impossible. Despite that, in matters of this kind one often has a situation in which one commodity balances against another and in the long run we come out more or less even. I do not think that that is a reason for attack.

The simple answer has been put by many hon. Members, including the hon. Member for Leek (Mr. Harold Davies), who pointed out very well that hon. Members cannot blame either my right hon. Friend or myself for the fact that sometimes it rains and sometimes it does not. The years are different. They do not follow a direct pattern. It is absurd to say that we should be able to get these Estimates dead right. It does not make sense to talk of gross miscalculations. There may be other attacks which hon. Members can drive home, but gross miscalculation is not one of them. This year events have caused fatstock guarantees to move, as it were, in the same direction, with the result that we were brought here today to examine and discuss this admittedly large bill. Coming at a time when the Government are making special efforts to control public expenditure, this has focused attention very sharply on our whole system of price support for agriculture, and understandably so. This has been evident from the points that have been made in the debate, but despite the differing views which have been expressed on the way that that support should or should not be administered, I am in no doubt, having heard what has been said in the debate, that the great majority of hon. Members are in agreement on the need for providing support. I do not think anybody disagrees with that.

But that measure of agreement carries with it certain obligations in thinking. Had there been any doubt on the subject of this general unanimity of view on support, I would have been fortified—in fact, I did fortify myself—by reading what the party opposite said in the preface to their booklet which I have with me—" Prosper the Plough. A policy for a sound and efficient British agriculture."

It is worth reading to the Committee some of the paragraphs in that document. It says: A sound and efficient agriculture, operating at a high level of production, is essential to the long-term economic stability of this country. British agriculture must never again be exposed to all the economic winds that may blow as it was between the wars. We are all in agreement with that. The document goes on to say: Because we are the largest food importing country in the world, possessing a relatively high standard of living, the fortunes of our agriculture are inevitably dependent upon Government policy. The Government could ruin our own farmers and farmworkers by allowing artificially (and perhaps temporarily) cheap foodstuffs into the country. That is what hon. Members opposite say. On the other hand, it could copy some other countries and protect our agriculture by high tariffs…This method would quickly lead to inefficiency and by resulting in high food prices, would he unfair to consumers. I have been searching this document for a profound philosophic statement. The document goes on to say: Another way of assisting agriculture is to have a system of guaranteed prices for home products that, combined with other forms of help, gives agriculture a high measure of assistance without isolating it from world events…As this method involves the expenditure of public money in various ways, in paying for subsidies, grants, administrative machinery and advisory services, etc., agricultural policies inevitably and properly become subjects of political concern. a profound truth. The level of the guarantees and the method of implementing them; the quantity of production to which guaranteed prices should apply; the encouragement of efficiency and other matters"— and now a profound remark— are all subjects upon which differing views may be held. As the preamble to a document which ends up with no constructive statements—[An HON. MEMBER: "Suggest some."] I am tempted to do so. It would make clear the paucity of basic thinking which hon. Members opposite have produced.

Mr. Peart

What has this got to do with the Estimates, even though it is a very good policy?

Mr. Maclay

It has a lot to do with the Estimates. The whole point of quoting these remarks is that it is fairly clear that by and large—[Interruption.] If the hon. Member for Workington (Mr. Peart) would stop talking to the Chair, leaving the Chair to its own business, and would allow me to answer him, it would be much better. What it has to do with the Estimates——

Mr. Peart

Behave yourself.

Mr. Maclay

If the hon. Gentleman is to sit on the Front Bench, he must not go on muttering. Hon. Gentlemen opposite have been in agreement throughout that a system of support of about this kind has been essential for the good conduct of agriculture in this country, and I shall repeat what the guarantee system is. Its purpose is twofold. It is intended to assure producers of a reasonable return, on average, for their produce, with all that means in terms of livelihood for an important section of our countrymen. This is important not only for the farmers who are directly associated, but also for those in the industries which depend on the farmers' custom for their own prosperity.

Secondly, the system is intended to ensure that the consumer has a plentiful and varied supply of food available at reasonable prices. Do not let us lose sight of these two points, and the second is particularly important as regards meat, for home production represents a very large percentage of all our carcase meat supplies.

Over the past five years—not including this year—the guarantees have cost us, on average, almost exactly £60 million, or just under 25s. per head per year. The amounts have varied in the totals and in the amounts paid for cattle, sheep and pigs in the different years. In 1956–57, the first year quoted, we paid out £74.7 million. In 1957–58 it was £82.6 million, and in the next three years we paid out £45.2 million, £50.9 million and £46.1 million, respectivley.

Taking the two years 1958–59 and 1959–60 together, there were 29 weeks during that period when no guarantee was payable on cattle and in the next year, 1960–61, the guarantee on cattle amounted to £12.3 million, which was actually less than in 1958–59, even though the guarantee was payable for 50 weeks of that year instead of only during 43 weeks. This year the position has been different and payments have amounted to just over double the average expenditure incurred during the past five years.

Hon. Gentlemen opposite should not talk as wildly as they have about the break-down of the system, for they have continually said that the system has broken down. Has it broken down because in one year it has produced a figure which, I agree, is large and about which we must worry? Is 25s. per head per year over five years a very big price to have paid for the supply of a plentiful and varied amount of meat at prices lower than those prevailing in other countries, except one or two of the basic producers?

I think that hon. Gentlemen opposite are grossly exaggerating the position. It has been stated that the Government have certain things to examine, and of course we have. We intend to examine them, just as my right hon. Friend made clear earlier today. But to talk about a system that has done what this system has done for the farmers and consumers as a complete breakdown is quite absurd.

I do not want to weary the Committee by going into the figures in too much detail, but I must mention the difference in cost to the Exchequer of implementing the guarantees for fatstock in 1960–61 and 1961–62. While the cost for 1960–61 was £46 million, the expected cost for 1961–62 is £124 million, giving a difference of £78 million. The farmer, of course, received the whole of the money in the first place in the form of subsidy payments, but the net effects are not so easily described with precision. We can see precisely that the farmer received £31 million made up of £13 million increase in guarantee awards for cattle and pigs and £18 million in guarantees on additional animals coming forward in 1961–62.

My right hon. Friend said earlier that there have been falls in the retail prices of meat amounting to about £50 million from which, in spite of what some hon. Gentlemen have said in an effort to attack that remark of my right hon. Friend, the consumer has undoubtedly benefited.

The burning question in the minds of many critics, both inside this Committee and outside, is the extent to which the distributive trades, particularly the butchers, have gained an unconvenanted benefit at the expense of the Exchequer. It is essential to get this in balance and in perspective. The total annual value of retail sales of all meat—I emphasise all meat—which means imported as well as home produced, carcase meat, processed meat and poultry—is over £1,300 million and the trade which handles it is an extremely scattered and complex one. It is simply not possible to attempt to evaluate in sums of money precisely the net effect on particular groups of traders of these additional Exchequer payments. One thing is quite certain, and that is that the customer must have benefited from the lower retail prices this year.

Mr. Hoy

We must get what is the right hon. Gentleman's reply to the Estimates Committee, which had this to say: Your Committee are concerned that this process"— that is, the reduction in price— has, in the opinion of the Department, operated so ineffectively. What is the answer to that?

Mr. Maclay

The answer is that we are not satisfied about certain people having had more in some cases than they should have. In an industry of this sort with a large number of shops and distributors involved, there is an enormous range of possibilities, but, as the hon. Member knows, shops vary in practice according to where they are and how they are run. Some of the smaller ones undoubtedly do maintain a policy of stable prices so far as they can. The year 1960 was not a good year for a lot of butchers, and I think most butchers would agree that 1961 was a very good year for them. It is quite impossible to determine accurately whether some people got much too much or much too little, but if hon. Members will ponder over the proportion of £50 million to £1,300 million they will realise the substance of what I am saying.

Mr. Peart

It was not only in the Estimates Committee's Report but in the Report of the Minister's own Department that the price reduction had not gone to the consumer.

Mr. Maclay

It is not the case with all the shops, as I said before, and the hon. Gentleman has got up to ask the same question again. We agree that there are certain things to be examined.

There is a recognition on every side that the increased expenditure this year arose out of the nature of the guarantees, but none of us would wish to leave that as the last word in the matter. The Government recognise and always have recognised it as their duty to see that the guarantees achieve their two-fold purpose effectively. We have to keep a constant and critical eye on our arrangements, and always be ready to introduce administrative and other reforms such as are necessary to ensure that the money paid out in the shape of guarantees is not wasted in any way.

As my right hon. Friend said, it is the Government's intention to do all they can to achieve greater stability in the marketing of meat in the coming year. We have also in mind a number of possible ways in which the situation may be improved in this respect. We know that the industry and the trade are as keen as we are on the necessity to avoid, if we can, a repetition of what happened last year. Most of the measures we have in mind impinge in some way, directly or indirectly, on matters which come within the ambit of the Price Review talks with the unions. As the Committee knows, these talks have already begun. They are, and always have been, confidential, and I therefore cannot go into further detail.

Now I come to the question of marketing and the committee which my right hon. Friend has announced that we shall set up. Today we have heard a lot from hon. Members opposite on the subject of livestock marketing and on the drawbacks of private forms of trading which are going on now and the need to achieve the purposes underlying the guarantee at less expenditure to the taxpayer or to the consumer than at present. Of course we agree that there is a need to look closely into the present marketing system. The experiences of last year have shown that with the level of production now achieved a relatively small disturbance in the flow of animals to the market can have an altogether disproportionate effect on the level of prices and the time they take to recover.

We have decided to set up a committee of inquiry to which reference was made by my right hon. Friend to look into the highly complex issues involved and to provide some of the answers which we need——

Mr. Fell rose——

Mr. Maclay

I am sorry, I cannot give way.

Hon. Members

Give way.

Mr. Maclay

I have said—I cannot give way—that changes——

Hon. Members

Give way.

Mr. Maclay

—in the pattern of sources of supply this year have been a dominant feature in marketing——

Hon. Members

Give way.

Mr. Maclay

Some of them should have been challenged and others should not. We are producing more meat for home supply in the coming year which will certainly not be less than this year. There is the question of the broiler industry and a change in the pattern of consumer demand. A question which has to be answered is whether the marketing system can adapt itself to this new pattern of supply and demand. Another question is what greater advantage can be taken of technical improvements——

Mr. Fell rose——

Mr. Maclay

I cannot give way.

Another question is whether our present set-up is the right one to handle the increased level of home production. What advantage should we get from regulating supplies to the markets and how can this be brought about? Another question is whether the maximum size of our markets and our slaughterhouses is correct. What are the implications of modern techniques of pre-packing and the growth of supermarkets and retail chain stores? All these points were raised by various hon. Members——

Mr. Fell rose——

Mr. Maclay

Very well, I will give way.

Mr. Fell

I am grateful to my right hon. Friend. I do not want to take up more than two seconds of his time. Will he say whether this committee is to be allowed to consider imports from Europe?

Mr. Maclay

My right hon. Friend made quite clear the terms of reference of the Committee and my hon. Friend the Member for Yarmouth (Mr. Fell) will find then clearly set out in HANSARD.

The hon. Member for Workington at the end of his speech tried to sum up his attack upon my right hon. Friend and myself and made a number of charges. He said that we had encouraged increased meat production last year. If he will read the speech of my right hon. Friend in the OFFICIAL REPORT, he will see clearly why that was done and last year the reasons were not objected to by hon. Members opposite. The hon. Member accused my right hon. Friend and myself of gross miscalculation. I have dealt with that. Does he also consider that the comments of the Estimate Committee were completely unjustified? It is not gross miscalculation, whatever the charge may be. The hon. Member said that the whole policy is wrong and I wish to explore that statement.

Mr. Winterbottom rose——

Mr. Maclay

No, I cannot give way. I am dealing with the hon. Member for Workington.

Does the hon. Member for Workington mean that he wishes us to scrap the 1957 Act?

Mr. Peart

No.

Mr. Maclay

The hon. Member says he does not want us to scrap the 1957 Act. Throughout his speech and that of other hon. Members a number of right hon. and hon. Members opposite were referring to the purposes of the 1947 Act with great nostalgia, and I wish to know whether they would revert to import controls.

A number of hon. Members mentioned the need for import controls. Clearly, all these matters have to be considered dispassionately. Is this the moment when hon. Members opposite would impose import controls? What regard would hon. Members opposite have to the long-term commitments to Australia and New Zealand? I hope they would have regard to them. I hope that the hon. Member for Workington will nod his head in agreement. What would they have done with the 1947 Act? Would they go back on their own Act? These are hypothetical questions, I admit, but they all arise out of the kind of speeches hon. Members opposite have been making.

Another charge made by one hon. Member was that we were acting too late in relation to marketing. Would he have argued a year or two years ago that we should have set up an inquiry into marketing?

Mr. Hoy

In 1953.

Mr. Maclay

Certainly in 1953, but this is 1961. [Laughter.] This is 1962. The argument which the hon. Members have been trying to develop is that we should have done it in fairly recent years, but I do not think that argument holds water. I ask hon. Members who have been repeatedly stating that a marketing board is necessarily the right device, to remember that we have to be fairly careful before we dive into a marketing board for a type of commodity such as fatstock. Milk is not the same kind of commodity; it is a single, homogeneous commodity.

Let hon. Members consider what happens—and must happen—at the moment. A large number of farms have to get beasts to market. There are a large number of small markets and there are the bigger markets. There are people who sell directly to the consumer and some who sell direct to the shop. The auctioneer and dealer has come in for a certain amount of abuse in this debate. Let us remember that this is a highly complex and very tricky trade. Are hon. Members quite certain that if we had a Government body or some other form of marketing board taking the place of the system which exists today it would not have landed itself into even worse difficulties?

I am not saying that these things do not need examining. That is why we are setting up a committee. I say very definitely that it is wrong to state categorically that it is simple to solve the problem by setting up anything as simple as a marketing board. I hope that hon.

Members opposite will at this stage realise that it is quite silly to divide the Commit tee.

Mr. Peart

I beg to move, That Item Class VIII, Vote 2 (Agricultural and

Food Grants and Subsidies), be reduced by £1,000.

Question put:—

The Committee divided: Ayes 167, Noes 254.

Division No. 81.]	AYES	[9.59 p.m.
Ainsley, William	Hart, Mrs. Judith	Pannell, Charles (Leeds, W.)
Albu, Austen	Hayman, F. H.	Pargiter, G. A.
Allaun, Frank (Salford E.)	Healey, Denis	Pavitt, Laurence
Allen, Scholefield (Crewe)	Henderson, Rt. Hn. Arthur(Rwly Regis)	Pearson, Arthur (Pontypridd)
Awbery, Stan	Herbison, Miss Margaret	Peart, Frederick
Baxter, William (Stirlingshire, w.)	Hewitson, Capt. M.	Pentland, Norman
Beaney, Alan	Hill, J. (Midlothian)	Plummer, Sir Leslie
Bellenger, Rt. Hon. F. J.	Hilton, A. V.	Popplewell, Ernest
Bence, Cyril	Holman, Percy	Prentice, R. E.
Bennett, J. (Glasgow, Bridgeton)	Houghton, Douglas	Proctor, W. T.
Benson, Sir George	Howell, Denis (Small Heath)	Randall, Harry
Blackburn, F.	Hoy, James H.	Rankin, John
Blyton, William	Hughes, Emrys (E. Ayrshire)	Redhead, E. C.
Bowden, Rt. Hn. H. W. (Leics, S. W.)	Hughes, Hector (Aberdeen, N.)	Reid, William
Bowles, Frank	Hunter, A. E.	Rhodes, H.
Boyden, James	Hynd, H. (Accrington)	Roberts, Goronwy (Caernarvon)
Braddock, Mrs. E. M.	Irving, Sydney (Dartford)	Robertson, John (Paisley)
Brockway, A. Fenner	Janner, Sir Barnett	Ross, William
Brown, Rt. Hon. George (Belper)	Jay, Rt. Hon. Douglas	Royle, Charles (Salford, West)
Butler, Mrs. Joyce (wood Green)	Jeger, George	Silverman, Julius (Aston)
Castle, Mrs. Barbara	Johnson, Carol (Lewisham, S.)	Silverman, Sydney (Nelson)
Cliffe, Michael	Jones, Dan (Burnley)	Skeffington, Arthur
Corbet, Mrs. Freda	Jones, Elwyn (West Ham, S.)	Slater, Mrs. Harriet (Stoke, N.)
Craddock, George (Bradford, S.)	Kelley, Richard	Slater, Joseph (Sedgefield)
Crosland, Anthony	Kenyon, Clifford	Small, William
Darling, George	Key, Rt. Hon. C. W.	Snow, Julian
Davies, Harold (Leek)	King, Dr. Horace	Sorensen, R. W.
Davies Ifor (Gower)	Lawson, George	Soskice, Rt. Hon. Sir Frank
Davies, S. O. (Merthyr)	Ledger, Ron	Spriggs, Leslie
Deer, George	Lee, Frederick (Newton)	Steele, Thomas
Delargy, Hugh	Lever, L. M. (Ardwick)	Stewart, Michael (Fulham)
Diamond, John	Lewis, Arthur (West Ham, N.)	Stones, William
Dodds, Norman	Lipton, Marcus	Strachey, Rt. Hon. John
Donnelly, Desmond	Loughlin, Charles	Symonds, J. B.
Driberg, Tom	MacColl, James	Taylor, Bernard (Mansfield)
Ede, Rt. Hon. C.	McInnes, James	Thomson, G. M. (Dundee, E.)
Edwards, Robert (Bilston)	McKay, John (Wallsend)	Tomney, Frank
Edwards, Walter (Stepney)	Mackie, John (Enfield, East)	Ungoed-Thomas, Sir Lynn
Evans, Albert	Mahon, Simon	Wainwright, Edwin
Foot, Dingle (Ipswich)	Manuel, A. C.	Warbey, William
Foot, Michael (Ebbw Vale)	Mapp, Charles	Watkins, Tudor
Forman, J. C.	Mason, Roy	Weitzman, David
Fraser, Thomas (Hamilton)	Mellish, R. J.	Wells, Percy (Faversham)
Gaitskell, Rt. Hon. Hugh	Mendelson, J, J.	White, Mrs. Eirene
Galpern, Sir Myer	Millan, Bruce	Whitlock, William
Ginsburg, David	Milne, Edward	Wilkins, W. A.
Gooch, E. G.	Mitchison, G. R.	Willey, Frederick
Gordon Walker, Rt. Hon. P. C.	Monslow, Walter	Willis, E. G. (Edinburgh, E.)
Gourlay, Harry	Morrison, John	Wilson, Rt. Hon. Harold (Huyton)
Grey, Charles	Moyle, Arthur	Winterbottom, R. E.
Griffiths, David (Rother Valley)	Noel-Baker, Francis (Swindon)	Woodburn, Rt. Hon. A.
Griffiths, Rt. Hon. James (Llanelly)	Oliver, G. H.	Woof, Robert
Gunter, Ray	Oram, A. E.	Wyatt, Woodrow
Hale, Leslie (Oldham, W.)	Oswald, Thomas
Hall, Rt. Hn. Clenvil (Colne Valley)	Owen, Will	TELLERS FOR THE AYES:
Hamilton, William (West Fife)	Padley, W. E.	Mr. Charles A. Howell and
Hannan, William	Paget, R. T.	Mr. McCann.
NOES
Agnew, Sir Peter	Bevins, Rt. Hon. Reginald	Brewis, John
Aitken, W. T.	Bidgood, John C.	Bromley-Davenport, Lt.-Col. Sir Walter
Allason, James	Biffen, John	Brooke, Rt. Hon. Henry
Arbuthnot, John	Biggs-Davison, John	Brooman-White, R.
Atkins, Humphrey	Birch, Rt. Hon. Nigel	Brown, Alan (Tottenham)
Balniel, Lord	Bishop, F. P.	Browne, Percy (Torrington)
Barber, Anthony	Black, Sir Cyril	Bryan, Paul
Barlow, Sir John	Bossom, Clive	Buck, Antony
Batsford, Brian	Bourne-Arton, A.	Bullard, Denys
Baxter, Sir Beverley (Southgate)	Bowen, Roderic (Cardigan)	Bullus, Wing Commander Eric
Beamish, Col. Sir Tufton	Box, Donald	Butcher, sir Herbert
Bell, Ronald	Boyd-Carpenter, Rt. Hon. J.	Butler, Rt. Hn. R. A.(Saffron Walden)
Bennett, F. M. (Torquay)	Boyle, Sir Edward	Campbell, Sir David (Belfast, S.)
Campbell, Gordon (Moray & Nairn)	Jackson, John	Quennell, Miss J. M.
Carr, Compton (Barons Court)	Jenkins, Robert (Dulwich)	Ramsden, James
Chataway, Christopher	Jennings, J. C.	Rawlinson, Peter
Clark, William (Nottingham, S.)	Johnson, Eric (Blackley)	Redmayne, Rt. Hon. Martin
Clarke, Brig. Terence (Portsmth, W.)	Johnson Smith, Geoffrey	Renton, David
Cole, Norman	Jones, Rt. Hn. Aubrey (Hall Green)	Ridley, Hon. Nicholas
Cooke, Robert	Kaberry, Sir Donald	Ridedale, Julian
Cooper, A. E.	Kerans, Cdr. J. S.	Rippon, Geoffrey
Cordeaux, Lt.-Col. J. K.	Kerby, Capt. Henry	Roberts, Sir Peter (Heeley)
Corfield, F. V.	Kerr, Sir Hamilton	Rodgers, John (Sevenoaks)
Costain, A. P.	Kimball, Marcus	Roots, William
Coulson, Michael	Kitson, Timothy	Ropner, Col. Sir Leonard
Courtney, Cdr. Anthony	Lancaster, Col. C. G.	Scott-Hopkins, James
Craddock, Sir Beresford	Leburn, Gilmour	Seymour, Leslie
Critchley, Julian	Legge-Bourke, Sir Harry	Sharples, Richard
Crosthwaite-Eyre, Col. Sir Oliver	Lewis, Kenneth (Rutland)	Shaw, M.
Curran, Charles	Lilley, F. J. P.	Shepherd, William
Currie, G. B. H.	Linstead, Sir Hugh	Smith, Dudley (Br'ntf'd & Chiswick)
Dance, dames	Litchfield, Capt. John	Smithers, Peter
d'Avigdor-Goldsmid, Sir Henry	Lloyd, Rt. Hn. Geoffrey (Sut 'nC' dfield)	Smyth, Brig. Sir John (Norwood)
de Ferranti, Basil	Longbottom, Charles	Soames, Rt. Hon. Christopher
Digby, Simon Wingfield	Longden, Gilbert	Spearman, Sir Alexander
Doughty, Charles	Loveys, Walter H.	Stanley, Hon. Richard
du Cann, Edward	Lucas, Sir Jocelyn	Stevens, Geoffrey
Duncan, Sir James	Lucas-Tooth, Sir Hugh	Stodart, J. A.
Eden, John	MacArthur, Ian	Storey, Sir Samuel
Elliot, Capt. Walter (Carshalton)	McLaren, Martin	Studholme, Sir Henry
Emmet, Hon. Mrs. Evelyn	McLaughlin, Mrs. Patricia	Summers, Sir Spencer (Aylesbury)
Farey-Jones, F. W.	Maclay, Rt. Hon. John	Talbot, John E.
Fell, Anthony	Macleod, Rt. Hn. Iain (Enfield, W.)	Taylor, Sir Charles (Eastbourne)
Finlay, Graeme	Macmillan, Maurice (Halifax)	Taylor, Frank (M'ch'st'r, Moss Side)
Fisher, Nigel	Maddan, Martin	Teeling, Sir William
Fletcher-Cooke, Charles	Maginnis, John E.	Thatcher, Mrs. Margaret
Forrest, George	Maitland, Sir John	Thomas, Leslie (Canterbury)
Fraser, Ian (Plymouth, Sutton)	Markham, Major Sir Frank	Thomas, Peter (Conway)
Frceth, Denzil	Marshall, Douglas	Thompson, Kenneth (Walton)
Galbraith, Hon. T. G. D.	Marten, Neil	Thompson, Richard (Croydon, S.)
Gammans, Lady	Mathew, Robert (Honiton)	Thorneycroft, Rt. Hon. Peter
Gardner, Edward	Matthews, Gordon (Meriden)	Thornton-Kemsley, Sir Colin
Gibson-Watt, David	Maudling, Rt. Hon. Reginald	Thorpe, Jeremy
Gilmour, Sir John	Mawby, Ray	Tiley, Arthur (Bradford, W.)
Godber, J. B.	Maxwell-Hyslop, R. J.	Tilney, John (Wavertree)
Gough, Frederick	Maydon, Lt.-Cmdr. S. L. C.	Touche, Rt. Hon. Sir Gordon
Grant, Rt. Hon. William	Mills, Stratton	Turner, Colin
Grant-Ferris, Wg. Cdr. R.	Montgomery, Fergus	Tweedsmuir, Lady
Green, Alan	More, Jasper (Ludlow)	van Straubenzee, w. R.
Grimond, Rt. Hon. J.	Morgan, William	Vane, W. M. F.
Gurden, Harold	Morrison, John	Vaughan-Morgan, Rt. Hon. Sir John
Hall, John (Wycombe)	Nabarro, Gerald	Vickers, Miss Joan
Hamilton, Michael (Wellingborough)	Nicholson, Sir Godfrey	Wade, Donald
Harris, Reader (Heston)	Nugent, Rt. Hon. Sir Richard	Wakefield, Sir Wavell (St. M'lebone)
Harrison, Brian (Maldon)	Oakshott, Sir Hendrie	Walder, David
Harrison, Col. Sir Harwood (Eye)	Orr, Capt. L. P. S.	Walker, Peter
Harvey, John (Walthamstow, E.)	Osborn, John (Hallam)	Walker-Smith, Rt. Hon. Sir Derek
Hastings, Stephen	Osborne, Sir Cyril (Louth)	Wall, Patrick
Heald, Rt. Hon. Sir Lionel	Page, Graham (Crosby)	Ward, Dame Irene
Hendry, Forbes	Page, John (Harrow, West)	Webster, David
Hill, Mrs. Eveline (Wythenshawe)	Pannell, Norman (Kirkdale)	Wells, John (Maidstone)
Hobson, Sir John	Pearson, Frank (Clitheroe)	Whitelaw, William
Holland, Philip	Peel, John	Williams, Dudley (Exeter)
Hollingworth, John	Percival, Ian	Williams, Paul (Sunderland, S.)
Holt, Arthur	Peyton, John	Wise, A. R.
Hope, Rt. Hon. Lord John	Pickthorn, Sir Kenneth	Wolrige-Gordon, Patrick
Hopkins, Alan	Pike, Miss Mervyn	Wood, Rt. Hon. Richard
Hornby, R. P.	Pilkington, Sir Richard	Woodhouse, C. M.
Howard, Hon. G. R. (St. Ives)	Pitman, Sir James	Woodnutt, Mark
Howard, John (Southampton, Test)	Pitt, Miss Edith	Woollam, John
Hughes Hallett, Vice-Admiral John	Pott, Percivall	Worsley, Marcus
Hughes-Young, Michael	Powell, Rt. Hon. J. Enoch	Yates, William (The Wrekin)
Hulbert, Sir Norman	Price, David (Eastleigh)
Hutchison, Michael Clark	Prior, J. M. L.	TELLERS FOR THE NOES:
Iremonger, T. L.	Proudfoot, Wilfred	Mr. Edward Wakefield and
Irvine, Bryant Godman (Rye)	Pym, Francis	Mr. J. E. B. Hill.

Original Question put and agreed to.

Resolution to be reported.

Resolution to be received Tomorrow: Committee to sit again Tomorrow.